CIHM 
Microfiche 
Series 
^l\/lonographs) 


iCIVIH 

Collection  de 
microfiches 
(monographles) 


Canadian  Institute  for  Historical  Microreproductions  /  Institut  Canadian  de  microreproductions  historiques 


si^s^i^Hnr? 


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iMBj'-s.'prK,;- r-cTTir-.    -  *^ 


Technical  and  Bibliographic  Notes  /  Notes  techniques  et  bibliographiques 


The  Institute  has  attempted  to  obtain  the  best  original 
copy  available  for  filming.  Features  of  this  copy  which 
may  be  bibliographically  unique,  which  may  alter  any  of 
the  images  in  the  reproduction,  or  which  may 
significantly  change  the  usual  method  of  filming  are 
checked  below. 


D 

D 

n 

D 
D 

D 
D 
D 
D 
D 

D 


D 


Coloured  covers  / 
Couverture  de  couleur 

Covers  damaged  / 
Couverture  endommag^ 

Covers  restored  and/or  laminated  / 
Couverture  restaur^  et/ou  pellicul^e 

Cover  title  missing  /  Le  titre  de  couverture  manque 

Coloured  maps  /  Cartes  g^ographiques  en  couleur 

Coloured  ink  (i.e.  other  than  blue  or  black)  / 
Encre  de  couleur  (i.e.  autre  que  bleue  ou  noire) 

Coloured  plates  and/or  illustrations  / 
Planches  et/ou  illustrations  en  couleur 

Bound  with  other  material  / 
Reli^  avec  d'autres  documents 

Only  edition  available  / 
Seule  Edition  disponible 

Tight  binding  may  cause  shadows  or  distortion  along 
interior  margin  /  La  reliure  serr^e  peut  causer  de 
I'ombre  ou  de  la  distorsion  le  long  de  la  marge 
int^rieure. 

Blank  leaves  added  during  restorations  may  ;ear 
within  the  text.  Whenever  possible,  these  have  been 
omitted  from  filming  /  Use  peut  que  certaines  pages 
blanches  ajout^es  lors  d'une  restauration 
apparaissent  dans  le  texte,  mais,  lorsque  cela  4tait 
possible,  ces  pages  n'ont  pas  ^t^  film^es. 

Additional  comments  / 
Commentaires  suppl^mentaires: 


L'Institut  a  microfilm^  le  meilleur  exemplaire  qu'il  lui  a 
6\6  possible  de  se  procurer.  Les  details  de  cet  exem- 
plaire qui  sont  peut-dtre  uniques  du  point  de  vue  bibli- 
ographique,  qui  peuvent  modifier  une  image  reproduite, 
ou  qui  peuvent  exiger  une  modification  dans  la  m^tho- 
de  normale  de  filmage  sont  indiqu^s  ci-dessous. 

[     I   Coloured  pages  /  Pages  de  couleur 

I I   Pages  damaged  /  Pages  endommag6es 

□   Pages  restored  and/or  laminated  / 
Pages  restaur^s  et/ou  pellicul^es 

pT^   Pages  discoloured,  stained  or  foxed  / 
1—1   Pages  d^olor^s,  tachet^es  ou  piqu^es 

I      I   Pages  detached  /  Pages  detach6es 

I  \/|   Showthrough  /  Transparence 

I      I   Quality  of  print  varies  / 


D 
D 


D 


Quality  in^gale  de  I'impression 

Includes  supplementary  material  / 
Comprend  du  materiel  suppl6mentaire 

Pages  wholly  or  partially  obscured  by  errata  slips, 
tissues,  etc.,  have  been  refilmed  to  ensure  the  best 
possible  image  /  Les  pages  totalement  ou 
partiellement  obscurcies  par  un  feuillet  d'errata,  une 
pelure,  etc.,  ont  ^t^  film^es  ^  nouveau  de  fa^on  k 
obtenir  la  meilleure  image  possible. 

Opposing  pages  with  varying  colouration  or 
discolourations  are  filmed  twice  to  ensure  the  best 
possible  image  /  Les  pages  s'opposant  ayant  des 
colorations  variables  ou  des  decolorations  sont 
film6es  deux  fois  afin  d'obtenir  la  meilleure  image 
possible. 


This  Kern  It  filmed  at  the  reduction  ratio  checlced  beiow  / 

Ce  document  est  filmi  au  taux  de  rMuetion  indiqui  ci-d«ssous. 


lOx 

14x 

18x 

22x 

26x 

30x 

J 

12x 


16x 


20x 


24x 


28x 


32x 


as's.'...  T-rwws-n^aisaK 


r^  *  /RiSE^iChiT^ 


s>^<e^"JP*''iTr"lK'  hM",! 


'^'^^nueTinpk- :  w  ft"'*?? 


Th«  copy  filmad  hare  hat  b««n  raproducad  thanks 
to  tha  ganarosity  of: 

Lakehead  University, 
Chancellor  Paterson  Library, 
Thunder  Bay 


L'axamplaira  film*  fut  raproduit  grAca  A  la 
gAnirosit*  da: 

Lakehead  University, 
Chancellor  Paterson  Library, 
Thunder  Bay 


Tha  imagas  appaaring  hara  ara  tha  bast  quality 
postibia  conaidarjng  tha  condition  and  lagibility 
of  tha  original  copy  and  in  kaaping  with  tha 
filming  contract  apacificationa. 


Las  imagas  suivantas  ont  M  reproduitas  avec  la 
plus  grand  soin,  compta  tanu  da  la  condition  at 
da  la  nanat*  da  l'axamplaira  filmA.  at  an 
conformity  avac  laa  conditions  du  contrat  da 
filmaga. 


Original  copias  in  printod  papar  covars  ara  fllmod 
baginning  with  tha  front  covar  and  anding  on 
tha  last  paga  with  a  printad  or  illuatratad  impraa- 
sion,  or  tha  back  covar  whan  appropriata.  All 
othar  original  copias  ara  filmad  baginning  on  tha 
first  paga  with  a  printad  or  illuatratad  impraa- 
sion,  and  anding  on  tha  last  paga  with  a  printad 
or  illuatratad  imprassion. 


Laa  axamplairaa  otiginaux  dont  la  couvartura  en 
papiar  aat  imprimia  sont  filmAs  an  commancant 
par  la  pramiar  plat  at  an  tarminant  soit  par  la 
darniira  paga  qui  comporta  una  amprainte 
d'imprassion  ou  d'illustration.  soit  par  la  second 
plat,  salon  la  cas.  Tous  las  autras  axemplairas 
originaux  sont  filmis  ^n  commanpant  par  la 
pramiAra  paga  qui  comporta  una  amprainte 
d'impraasion  ou  d'illustration  at  an  tarminant  par 
la  darniira  paga  qui  comporta  una  talla 
amprainta. 


Tha  last  racordad  frama  on  aach  microficha 
shall  contain  tha  symbol  — ^  (maaning  "CON- 
TINUED ").  or  tha  symbol  V  (maaning   "END"), 
whichavar  applias. 

Mapa,  platas.  charts,  ate,  may  ba  filmad  at 
diffarant  reduction  ratios.  Thosa  too  larga  to  ba 
antiraly  includad  in  ona  axposura  ar»  filmad 
baginning  in  tha  uppar  laft  hand  cornar.  laft  to 
right  and  top  to  bottom,  as  many  framas  as 
raquirad.  Tha  following  diagrams  illustrata  tha 
mathod: 


Un  das  symbolaa  suivants  apparaitra  sur  la 
darniira  imaga  da  chaqua  microfiche,  salon  la 
cas:  la  symbols  -^  signifia  "A  SUIVRE".  la 
symbols  ▼  signifia  "FIN". 

Laa  cartas,  planchas,  tableaux,  etc.,  peuvent  etre 
film^s  A  des  taux  da  reduction  diffdrents. 
Lorsque  ie  document  est  trop  grand  pour  etre 
raproduit  an  un  saul  cliche,  il  est  U\mi  i  partir 
da  Tangle  supArieur  gauche,  de  gauche  A  droite. 
et  de  haut  an  bas.  an  pranant  la  nombre 
d'imagas  nAcessaire.  Las  diagrammas  suivants 
illustrant  la  mAthoda. 


1 

2 

3 

4 

5 

6 

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(ANSI  and  ISO  TEST  CHART  No.  2) 


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1 


Modern  Business 

A  Series  of  Texts 
prepared  as  part  of  the 

Modern  Business  Course  and  Service 


Rtgttltrtd  Trade  Mark 

UnUed  Statet  and  Great  Britain 

Marea  Regiatrada,  U.  de  F. 


Alexander  Hamilton  Institute 


'ag^r^ 


Modern  Business  Texts 

Prepared  as  ])art  of  the 
Modern  Business  Course  and  Service 


1. 

Business  and  the  Man 

2. 

Economics 

The  Science  of  Business 

3. 

Business  Organization 

4. 

Corporation  Finance 

5. 

Marketing  and 

Merchandising 

6. 

Salesmanship  and  Sales 

Management 

7. 

Advertising  Principles 

8. 

Office  Administration 

9. 

Accounting  Principles 

10. 

Credit  and  Collections 

11. 

Plant  Management 

12. 

Cost  Finding 

l.'J. 

Advertising  Campaigns 

U. 

Business  Correspondence 

15. 

Inland  Traffic 

16. 

Foreign  Trade 

17. 

Banking  Principles  and 

Practice 

18. 

International  Jixchange 

19. 

Insurance 

20. 

The  Stock  and  Produce 

Exchanges 

21. 

Accounting  Practice 

22. 

Financial  and  Business 

Statements 

23. 

Investments 

24. 

Commercial  Law 

EDITOR-IN-CHIEF 


JOSEPH  FRENCH  JOHNSON 

EDITOKS.  WRITERS  AND  CO.VSri.TANTS 

f  See  list  on  page  V  of  Volume  I J 


Inland  Traffic 


By 

Simon  J.  McLean 

Assistant  Chief  Co™a.is«ioner.  Board  of  Railway  Co.^i.W™ 

for  Canada 


Modern  Business  Texts 

Volume  15 


A.') 


0(  L-r- 

f     '    ... 


6S29 


Alexander  Hamilton  Institute 

New  York 


fc£"  :;:.■  <M»«P.-    AifJKto^wr-T.iW- 


Copyright.  1914.  by  Alexander  Hamilton  Institute 

Copyright  in  Great  Britain,  1914,  by  Alexander  Hamilton  Institute 

All  rights  reserNcd,  including  translation  into  Scandinavian 

Made  in  U.  S.,  A. 


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PREFACE 

The  incidents  of  the  contract  of  carriage  and  tlie 
prohJenis  concerned  with  the  rates  char^^ed  for  rail- 
nay  services  have  developed  a  large  body  of  ,    -nda- 
•ve  enactn.ents.     Transportation  is  a   fundanier.tai 
factor    ,n    nuHlern    life.     This    vohnne    on    "Inland 
Iraffic     ,s  concerned  with  an  ar.alysis  and  explana- 
tion of  some  of  the  more  in.portant  phases  of  Canada's 
transportation  n.echanism;  the  central  position  beinix 
given  to  railM'ay  transportation. 

Many  important  pronlems  of  public  policy  arise 
out  of  the  relation  of  the  transportation  mechanism 
o  he  pubhc.  .]h,t  the  limitatir,n  of  scope  of  this 
hook  precludes  other  than  incidental  references  to 
them.  The  treatise  is  ,  narily  concerned  with  the 
practical  working  as  ahccting  business. 

An  outline  sketch  of  historical  development  is  .riven 
to  make  clearer  the  setting  of  the  Canadian  tn  ffic 
situation  The  development  of  Canada's  transporta- 
lon  facd.ties  is  of  interest  both  to  the  student  of 
heg.nmngs  and  to  the  student  of  present  day  prob- 
lems. At  every  step,  it  is  a  stuay  of  Canada  in  the 
making. 

Governmental  aid  has  been  extended  to  railway 
construction  with  a  view  to  developing  settlement 
and  expanding  trade.     There  has  also  been  govern- 

rr 


.ViSH 


•  /■"vr*'- 


VI 


phi:  FACE 


iHcnt  aid  and  const  met  ion  of  railways,  intended  as 
lionds  to  tie  together  the  seattered  portions  of  C'aruuhi. 
The  poliey  of  railway  suhsidi/ing  hy  govenuneiual 
bodies  began  when  private  fnnds  of  eapital  in  Canada 
were  practically  non-existent.  What  began  as  a 
necessity  has  eontinned  as  a  habit. 

Under  the  stinjuhis  of  governmental  aid,  there  has 
been  a  rapid  and  nndisciplined  railway  expansion. 
Today  the  most  important  practical  transportation 
problem  facing  Canada  is  the  development  of  its 
highways.  By  their  improvement  and  the  conse- 
quent lowered  costs  of  transportation,  new  areas  will 
be  linked  up  to  the  railways,  thereby  permitting  them 
to  be  utilized  more  efficiently  than  at  present. 

S.  J.  McLean. 


Ifa^^X^^^g^'f  •  ^-r'^-" 


TABLE  OF  COXTKXTS 


CHAPTKH  I 
CANADIAN    RAILROAD    HISTOUV 

■EtTION 

1.     Early  Waterways '*"^ 

'i.     Improved  Ili^hvvavs    .  ^ 
.'{.     The  First  Ri.ilroa<i.s     .       . 

4.     Railrt)a<Js  uiuler  (Guarantee  Act (? 

.).     Period  of  Great  Railway  Development     ....  6 

<).     Government  Loans  to  Grand  Trunk 7 

7.  Other   Railway   Construction ^ 

8.  Intel volonial   Railway ^ 

9.  Construction    and   Operation <) 

10.  Comparison  of  (irand  Trunk  With  Great  Western 

Railwav     ...  1 

•       .  I 

11.  Grand  Trunk  Absorbs  (ireat  Western  .       .       .       .  li 

12.  (Jrand  Trunk  Acquires  Other  Lines    .       .       .       .  H 

13.  Transcontinental  Line   ......  !« 

14.  ("anadian  Pacitic  to  Build  and  Operate  i^ine  .      .  12 

15.  Eastern   Connections y, 

16.  Monopoly  Clause  in  Canadian  Pacific  Charter   '.  U 

17.  Traffic  Facilities  for  Western  Wheat  Areas   .       .  U 

18.  Subsidy  Provisions  for  Canadian  Pacific  ...  15 

19.  The  MacKcnzie  and  Mann  Railways    ....  16 

20.  Canadian    Northern    Acquired    Northern    Pacific 

Lines    in    Manitoba ^^ 

ii\.     The  Grand  Trunk  Pacific  Project  .       .      .      .      .  17 

22.      Terms  of  the  C  barter 1g 

2Ji.      Grand   Trunk   Shareholders   Dissatisfied    .       .       .  19 

■H.      Grand  Trunk   Pacific  Becomes  Political   Issue     .  10 

vii 


^"i  INLAND  TRAFFIC 

SKCTION 

-io.      Government  Operation 20 

2().      Other   Systems 20 

«w7.      Railway  Association 21 

28.  Expansion  of  the  Government  Railway  System      .  22 

29.  Canafhan    National    Railway    System      ....  25 
.'JO.      Concentration  of  Railway  Control 25 

CHAPTER  II 

THE  GOVERXMKXT  AM)  THE  RAUAVAYS 

1.  Railway    Control gy 

2.  Government  Aid q^t 

3.  Government  Advances  to   Railways      ....  28 

4.  Subsidies on 

5.  Railway  Construction  Under  New  Subsidy  Policy 

of    1882 '.       .      '.  30 

6.  Land  Grants,  Subsidies  and  Loans 31 

7.  Bond  Guarantees an 

8.  Rate  Regulation ^a 

9.  Legislation o^ 

10.  Rej-jort  and  Investigation 34 

11.  Report    on    Rate    Grievances 35 

12.  Dual  Functions  of  Committee 3^5 

13.  Report   Recommended   Railway  Commission    .       .  37 

14.  Board   of   Railway    Commissioners   Created    .       .  37 

15.  Power  of  Board  Over  Location,  Construction  and 

Operation 00 

16.  Jurisdiction  Over   Rates  oa 

_  ^                                                           ^  ^ 

1/.  Iraffic   Facilities   and   :\Iethods 39 

18.  P:x press,   Telegraph    and   Telephone    ....  40 

19.  Amended  Act  Provides  for  Grain  Movement  .       .  40 

20.  Procedure      . ^^1 

21.  Division    of   Board   Into   Two   Sections    ...  41 

22.  Procedure  of  Board  Informal 43 

23.  Findings  of  Board  on  Law  and  Fact  ....  4,2 


CONTENTS  i, 

sicTioy 

24.  What  the  Board  Has  Accomplished    ....  '43 

25.  Applications  and  Complaints 44 

CHAPTKR  III 

DEVELOPMENT  OF  RAILWAY  FACILITIES  AND 
EQUIPMENT 

1.  Expansion  of  Canadian  Railway  System  46 

2.  Distribution  of  Railway  Mileage    ."..'46 

3.  Potential  Railway  Traffic   .       .                          *       '  « 

4.  Actual   Traffic    ....             ,q 

.5.     Freight  Traffic          .....]'''  ^^ 

6.  Commodities    Carried    by    Railway    Systems    '.       ]  50 

7.  Passengers  Carried          ......  50 

«.     Tonnage  Sources 50 

9.     Railway  Mileage  of  Canada    ....             .  51 

10.  Improvements   in   Roadbed  and   Rolling  Stock    .  52 

11.  Increased  Size  of  Freight  Cars 53 

12.  Car  Loading _„ 

13.  Advantages  of  Electric  Traction  Over   Steam    '.  55 

14.  Economy  in  Operation k^. 

15.  How  Earnings  Are  Measured 53 

CHAPTER  IV 

PRIXCIPLKS  OF  FREIGHT  CLASSIFICATION 

1.  Classification   Fundamental         .  gQ 

2.  Early  Tariff  Classification  ......       .  fio 

3.  Railway  Contention  on   Rating 62 

4.  How  Classifications  Are  Built g4 

5.  Classifications   of  the  Ignited   States    ....  6,5 

6.  Canadian   Classification ^Y 

7.  International  Traffic .68 

8.  Expansion   of  Canadian    Classification      ...  69 

9.  Statistical  Returns  to  Government      ,  71 


10 


X 


INLAND  TRAFFIC 


SECTION 


PAOK 


11.  Follow  Lot  Rule 73 

12.  Car  Measurements 76 

13.  Cost  of  C.  L.  and  L.  C.  L.  Shipments  ....      77 


1. 
2. 
3. 
4. 

5. 
6. 

7. 
8. 

9. 
10. 
11. 
12. 
13. 
14. 
15. 
16. 
17. 
18. 


CHAPTER  V 

FEATURES  OF  CANADIAN'  FREIGHT  CLASSIFICATION 

Uniformity  in  Canada 80 

Mixing  Privilege 81 

Effect  on  Shippers  and  Consumers 83 

Divergent    Trade    Interests    Secure    Compromise 

Classification 84 

New  Distribution  Centers 85 

Long  and  Short  Hauls  for  Prairie  Centers   .      .  85 
Jobbing   Businesses   and    Classifications    ...  86 
Edmonton  Objects  to  Extension  of  Mixing  Privi- 
lege        87 

Distributive  Business,  a  Question  of  Balance  .      .  88 

Factors   Affecting  Classification 88 

Value  of  the  Article 89 

Bulk  and  Weight 9I 

Risk  Attached  to  Carriage 92 

Facilities  and  Equipment  Required      ....  94 

Classification   in   Operation  in  Canada      ...  96 

New  Issues  of  Classifications 98 

Board's  Participation  in  Classifications    ...  99 

False  Classification   and  Complaints    ....  99 


1. 

c> 

3. 


CHAPTER  VI 

FREIGHT  RATES 

Importance   of   Freight    Traflic lOi 

Tonnage  and  Mileage  Service 102 

Railway  Rates  of  Universal  Interest   ,      .       .      .102 
Competition iqi 


CONTEXTS  xi 

BIX.TION 

PA(.t 

5.  Transportation  Compared  With  Merchandising  and 

Manufacturing jO.> 

6.  Evils  of  Parallel  Lines  100 

CHAPTER  VII 

THK  BASIS  OF  UATK  MAKING 

1.     "Postage  Stamp"   Rates 109 

a.     Distance  Rates HO 

3.  Rates  Based  on  Capitalization Hi 

4.  Physical  Valuation  as  a  Rate  Basis   .       .      .      .112 

5.  Physical    Valuation   and    Its   Effect    .       .      .      .112 

6.  Cost  of  Service 115 

7.  What  Is  Cost  of  Service.^ Hg 

8.  Factor  of  Value  in  Cost  of  Service    .       .      .      .119 

9.  Allocation  of  Railway  Costs 120 

10.  Costs  are  Average,  Not  Specific 120 

11.  What  the  Traffic  Will   Bear 1  121 

12.  Other  Applications  of  This  Principle  .       .      .      .122 

13.  Practical  Meaning  of  the  Term 123 

14.  View  of  Canadian  Manufacturers'  Association    .  126 

15.  Determining  the  Reasonableness  of  a  Rate   .      .  127 
1(5.  No  One  Factor  Determines  Reasonableness   .      .  128 


1. 
o 

3. 
4. 
5. 
6. 

7. 
8. 


CHAPTER  VIII 

FREIGHT  RATKS  I\  PRACTICE 

Class  Tariffs  and  Commodity  Tariffs      .      .      .  130 

Comparisons   of    Freight    Traffic 133 

Difficulty  of  Comparing  Foreign  Freight  Rates   .  135 

Terminal  Charges   Kept   Separate  from   Rates    .  136 

Two  Leading  Factors  in  Freight  Rates    ....  136 

Switching  Costs  at  Winnipeg igy 

Terminal  Cost  in  Wisconsin    ..,..,_  139 

Distance  as  a  Factor  in  Rates 140 


^»  INLAND  TRAFFIC 

SKCTIO.V 

y.     Distance  Basis  of  Rates  in  Official  Classification  '^" 
Territory  ...  ,  . , 

10.  Distinction  Between  Local  and  Thru  Rates  144 

11.  Arriving  at  a  Tiiru  Rate ^_^q 

CHAPTKR  IX 

COMPETITIVE  JACTOKS  IN   RATE  MAKI.VG 

1.  Competition  of  Lines  of  Different  Lengths    .       .  U7 

^.  Difterential   Rates ,  ,„ 

S.  Water  Competition 150 

4.  Changing  Center?,  of  Production    .       ,       .       .  153 

5.  Competition   of    Ports 154 

6.  .Market  or  Trade  Competition  ...*'.'  155 

7.  Rates  for  Sugar  and  Oil    .......*  jsg 

8.  Rates   for  Comj)lementarv   Commodities    .       .'       *  158 
y.  hcope  of  Market  Competition 159 

CHAPTER  X 
PHASES  OF  RATES  AND  TAKIEFS 

1.  Freight   Tariffs   and   tJie  Railway   Act  ifji 

2.  Standard  Tariff'        •       •             .      .       .      !      !  leJ 

3.  Steps  in  Development  of  Standard  Tariffs  16*!^ 

4.  Standard  Scales  in  the  West   ....  153 

5.  New   Scales  Adopted      ••.165 

6.  Prairie  Standard  Tariff  Replaces  Saskatchewan  .'    165 

7.  h^xtension  of  Manitoba  Scale  ...  jgg 

8.  Pacific   Standard   Tariff      ■      •      .      .      .      .  IQQ 

9.  British  Columbia  Lakes  Standard  Tariff  .  167 

10.  Where  Maximum  Rates  of  Pacific  Standard  Ap- 

P'y jgg 

11.  When  Combination  Rates  Apply  "    jgg 

IS.     Why   Rafe   Scales   Differ    ....  jgg 

14.     Standard  Rates  Are  Maximum  Rates  .      .'      .*      .'   igg 


■^^■^PiS! 


CONTEXTS  xili 

SECTION 

15.  Freight  Rate  Increases  from  1916  to  1920    .       .  169 

16.  Crowsncst    Pass   Agreement '  172 

17.  Special  and  Competitive  Tarifls  '.       *      *  173 

18.  Transcontinental  Kates  ...  l*" 

19.  Transcontinental  Tariff  No«   Filed  By  Canadian 

Freight  As.sociation  ...'..  175 

20.  How   Rates   Are  Quoted  176 

21.  Water   Competition   Governs    Rates   to   Terminal 

Points ,»,p 

22.  Rasing  Point  Changed  on  Transcontinental  Clas.s 

Rates ,..,.. 

23.  Group  System  Csed  for  Quoting   .       .       .  .       .    178 

24.  Differential  I.ake-and-Rail  Routes        .  179 
Sr).     Commodity  Traffic  East-Bound,  Important  .       '    180 


CHAPTER    XI 

TOWX  TARIFFS,  KXPOUTS  AND  IMPORT  RATES 

Distributive  Rates 1^1 

International  Rate  Case 18"'> 

Rate  Readjustment  and  Group  Rearrangement    .  181. 

Town  Tariffs  in  the  East 184 

Some  Objections  Overcome i^r^ 

Town  Tariff  System  Related  to  Rate  Reductions  .  186 

Western  Rate  Case  Causes  Tariff  Rearrangement  1S7 

Town  Tariff'  Points ■^^^ 

Export   and    Import    Rates    in    Canada    .       .       .  19() 

Export  Traffic  on  Cliicago-Xew  York  Base   .       .  191 

Im|)ort    Rate  Anomalies 192 

Influences  on   Import   Rates .194 


1. 
2. 

;i. 
4. 
.5. 

6. 

i . 

H. 

9. 
10. 
11. 
12. 


y„ 


CHAPTER    XII 
IXTEhCHAN'CIXG  TRAFFIC  WD  OTHER  SEVICES 

1.      Transit  Arrangements 19^; 

•      •      .      .  .198 


2.     Stop-Ovcr   Arrangements 


I 


«iv  INLAND  TRAFFIC 

SKCTIO.V 

a.  Tariffs     Recognize    Principle    of    Consignments 

Stopped  in  Transit jj 

4.  Changing  Destination  in  Transit l< 

5.  Concentration  Rates g( 

6.  Special   Rate   Reductions 2( 

7.  Cartage  Service 2( 

8.  Cartage  Charge  Not  Under  Board's  Jurisdiction  .  2C 

CHAPTER  XIII 

,      PASSENGER  TRAFFIC 

1.  Water  and  Port  Competition  in  Passenger  Traffic  20 

2.  Distance  Important  Factor go 

3.  Time  Element 20 

4.  Expensive  Stations 20 

5.  Other  Factors 21 

6.  Passenger   Business   in   Practice 21 

7.  Passenger  and  Freight  Receipts  Compared   .      .21; 

8.  Density  of  Traffic 21 

9.  Effect  of  Economic  Depression  on  Passenger  Busi- 

"^"^ 21J 

10.  Measurement  of  Passenger  Traffic      .      .      .      .  21( 

11.  Differences  in  Freight  and  Passenger  Busiiiess   .  21' 

12.  Capacity  of  Cars 21  { 

13.  "Dead"  Weight 21 J 

14.  Increase  in  Weight  and  Cost  of  Passenger  Equip- 

ment      21C 

15.  Relation  Between  W^eight  of  Vehicle  and  Returns 

on  Cost 021 

16.  Weight  and  Cost  Measured  in  Capacity.      .      .    221 

17.  Occupancy  of  Sleeping  Cars 22S 

18.  Passenger  Hauls  Kept  Down  By  Suburban  Traffic  22a 

19.  Commutation  Business  as  Part  of  Railway  Earn- 

'"ffs 229 


PAOK 

;nts 

.  199 

.  199 

.  200 

.  201 

.  202 

n  .  204 


iffic  206 
.  207 
.  207 
.  209 
.  210 
.  212 
.  213 
.  214 

51- 

.  215 

.  216 

.  217 

.  218 

.  219 

P- 
.   219 

ns 
.    221 
.   221 
.   222 

Re  223 

n- 
.   223 


CONTENTS 

KKCTIOir 

20.  Automobiles  Affect  Passenger  Revenue 

21.  Differences  Between  Freight  and  Passenger  Busi- 

ness     .... 


zv 

PAni 

22^ 


225 


1. 

2. 

3. 

4. 

5. 
I  6. 
'     7. 

8. 

9. 
10. 
11. 
12. 
13. 
14. 
15. 
16. 
17. 
18. 
19. 
20. 


1. 

2. 
3. 

4. 


CHAPTER  XIV 

PASSENGER  RATES 

Passenger  Rates  and  the  Railway  Act  of  Canada  .   227 

Standard  Rates  in  Effect 228 

Different  Kinds  of  Passenger  Tickets  .      ."      .'  *  3<»o 

Provisions  for  Unused  Tickets      ....  232 

Rules  for  Baggage .  233 

Baggage  Defined .233 

Railway's  Liability  for  Baggage  .      .      .      .*  *  233 

Storage  Charges 234 

Initial  Carrier  Liable  for  Baggage     ...  334 

Baggage  Handled  in  Toronto  .....  235 

Parcels  Checked  at  Toronto    .....  235 

Baggage  Carried  By  Railways      .      !      .      *  *   235 

Sleeping-Car  Service .  236 

Classified  Passenger  Rates        .      .      .      .      .  235 

Passenger  Classes  in  Europe   .....  233 

Class  Rates  in  Foreign  Countries  ....  239 

Average  Hauls  in  Foreign  Countries  .      .  239 

Passengers  per  Train  in  Foreign  Countries   .'  .'   240 

Zone   Tariff  System 241 

Methods  Used  in  European  Passenger  Rates  .  .   24« 

CHAPTER  XV 

CONTRACT  OF  CARRIAGE 

Common  Law  Obligations  of  the  Railways  .      .  243 

Bill  of  Lading  and  Its  Conditions  .      .'  aA 

J-""""-- :  :  m 

IVTS'' «*8 


*!'. 


xvi  INLAND  TRAFFIC 

SBCTION  PAOl 

5.  Liabiliiv  as  a  Warcliousenian Ji-tS 

6.  Warehouse  Defined 5iJ49 

7.  Storage  and  Demurrage  Cliargos 249 

8.  Loss   or  Danuige 249 

9.  Payment  of  Charges iJ50 

10.  Forms  of  the  Bill  of  Lading 250 

11.  Due    Diligence 253 

CHAPTER  XVI 
MOVING  THE  TRAFFIC 

1.  Actual  Car  Movements 254 

2.  Manifest  Freight  Attains  High  Speeds    .      .       .  255 

3.  Demurrage 255 

4.  Claims  Presented 258 

5.  Demurrajre  and  Car  Shortage 258 

6.  Car  Detentions 259 

7.  Higher  Demurrage  Charges 261 

8.  Special  Delays  Occur  in  Unloading   ....  262 

9.  Average  Demurrage 263 

10.  Reciprocal  Demurrage 265 

11.  Railway  Interrelations  and  Per  Diem  Charge  .      .  268 

12.  Interswitching 270 

13.  Industrial   Sidings 271 

14.  The  Work  of  the  Claims  Department        .      .       .273 


CHAPTER  XVII 
EXPRESS  SERVICE 

1.  Express    Service   and    Its    Scope 276 

2.  Early  History  of  Express  Companies  ....  278 

3.  Express   Companies  in   Canada 280 

4.  Arrangements  With  Railways 281 

5.  Provisions   of   an    Agrooment 282 

6.  Arrangements  With  Agcnt3 284 

7.  Express  Classification 285 


CONTENTS  x^ji 

««CTIOV 

8.  Value,  Weight  and  Space ^'^^ 

9.  Conditions  of  Carriage  .  *      *    3uu 
10.      Liability  Under  Revised  Kxpre^s  Iteeeipt   !       '       '    $89 

.  Lmbihties  Under  Various  Fonns  of  Kc!cipt.s  .       '    ^nju 

12.  Standard  Mileage  Tariffs   .  i  ■       ■    ■-J" 

la.  Differences  in  Traffic  Conditions    ."       .'       '  '       '    Zal 

14.  Four  Standard  Tariffs  '             '   ,,,.7. 

15.  Local  and  Transfer  Tariffs  '  '       "   uq- 

16.  Rates   as   Affected   R.v   Quantity  .'       '       "              "    cnt' 
1^.  Freight  Rate  as  a  Basis    .        '  '      '             '   a«o 

18.  Special  Circulars      .  2in. 

19.  The  Graduate  Table      .  i;Z 

20.  Rates  Not  Uniforn.  .  fJ! 

21.  Single  Thru  Rates  ....".'.■      .'      "      '   3^^ 

CHAPTER  XVIII 
INLAND  WATER  TK AXSPORT ATION 

1.  VV^ter  Transportation  as  a  Regulator  of  Rates  .  307 

2.  Efficiency    of   Waterways     .  ano 

3.  Canal  Terminals       .      '.  .'j"^ 

4.  Obligations  of  Vessel  Carriers  ." T^c 

5.  Scope  of  Statutory  Provisions  on  Wat'er  Carriage  309 

6.  Fxempt.ons  Prohibited  in  Bill  of  Lading  .  ^  jio 

7.  Due  Ddigence     ...  •       •  .>»iw 

8.  Limited  Liability      . J^^" 

9-     Contents  of  Bill  of  Lading ;!![! 

10.  Dangerous    Shipments    Must    Be    Declared  .'  '   31 

11.  Railway  Bill   Used   on   Lakes    .  o' 

12.  Provisions  of  Grain  Bills  of  Lading  .'      "  '  '   t ! 

13.  General  Liens      ...                                 •  •  •   -ill 

U.     What  Constitutes  Complete'  Delivery  .'      "       '       "    III 
io      Canadian  Lake  and  Canal  Route  . "  "       '    o^Z 

16.  The  Welland  Canal        ...  '      '  '   I]. 

17.  Traffic  on  the  Welland  Canal  .      .*      '      '  "    ^n  t 

•      '  .010 


^^W 


TRP 


xviii  INLAND  TRAWIC 

18.  Ottawa  System jjKj 

19.  No    Canal    Tolls ;j|(5 

20.  Great  Lakes  TiMftic '    'JH 

21.  Traffic  on  the  I'lJpM- Lakes .•j^-' 

22.  t'haracter  of  Fr  ight jjiy 

CHAPTER  XIX 

CHAIN  .WD  OTHER  TRAFFIC  ON  THE  GREAT  LAKES 

1.  Questions  Connected  With  Grain  Traffic   .       .       .321 

a.     Capacity  of  Elevators 322 

3.  Method  of  Doing  Business  Under  Grain  Act  .      .    322 

4.  Licenses  and  Inspection 322 

5.  Causes  for  Car  Shortage 323 

6.  Documents  in  Grain  Shipments 324 

7.  Statutory  Grades  of  Grain 325 

8.  Special  Charges 326 

9.  Utilization  of  Elevat'     Facilities 326 

10.  Analysis  of  Grain  Movement 326 

11.  Grain  Traffic  Divi:  ted  to  United  States  .       .      .327 

12.  Upper  Lake  Traffic  Encourages  Specialized  Vessel 

Construction 328 

13.  Package  Freight 32S 

14.  Influences  Affecting  Lake  Rates 329 

15.  Load  Factor  in  Lake  Traffic 329 

Ky.     Movement  of  Traffic 330 

IT.  I'ornif'tion  of  Canada  Transportation  Lines,  Ltd.  331 

18.  Advtiit   of  Large   Vessels 332 

19.  Loading  and   L'nloading 333 

20.  Combined  Inland  and  Ocean  Traffic    .  .      .    334 

21.  Lake  Rates 335 

22.  Ton-Mile  Rate   in   Water-Borne  and  Rail-Borne 

T'-affic 336 

£3.  Variations  on  Watii -Borne  Grain  Rates   .       .       .    337 

24.  Comparison  Between  Lake  and  Canal  Movements  338 


I 


INLAND  TRAFrIC 


CHAPTER  I 
CANADIAN  RAILHOAD  HISTORY 

1.  Ear!//  xvaterrayH.—lu  the  early  days  of  indus- 
try and  connnerce.  waterways  are  all-important,     in 
a  new  country,  sueli  ms  Canada,  (nie  observes  in  the  dis- 
tribution of  settlement  that  inHuenee  of  waterways 
which  on  account  of  the  lapse  of  time  is  more  masked 
in  older  lands.  In  Xova  Scotia,  the  extensive  coast  line 
and  the  numerous  rivers  determined  the  settlement.  In 
Xova  Scotia,  as  in  Ensdand.  it  is  difficult  to  find  any 
point  more  than  forty  miles  fron.  the  sea.    This  made 
the  sea  an  im])ortant  element  both  in  the  settlement 
and  in  the  trade  of  Xova  Scotia.    In  Xew  Brunswick, 
the  coast  lines  of  the  Bay  of  Fundy,  the  Bav  Chalcur 
and  the  Gulf  of  St.  Lawrence,  and  the  course  of  the 
river  St.  John  cooperated  in  determinin|r  where  set- 
tlement should  be.    As  late  as  the  nn'ddle  of  the  nine- 
teenth century,  Xew  Brunswick  was  divided  into  louff 
hues  of  settlement  along  the  watercourses  with  tracts 
of  wilderness  between,  which  were  traversed  -^  rare 
intervals  by  roads  leading  from  one  line  of  s  lent 

to  another.     It  was  natural  that  lumbering  and  its 
auxiliary  industries  should  first  attract  attention  there. 

1 


2 


INLAND  TRAFFIC 


*    I- 


In  the  colonies  of  Tpper  and  Lower  Cunada,  the 
St.  Lawrence  and  the  Cireat  Lakes  were  from  an 
early  date  an  important  factor  in  settlement.  Today 
the  white-walled  villages  of  Quehec  which  line  the  St. 
Lawrence  in  almost  continuous  formation,  while  in 
part  due  to  tlie  French-Canadian  system  of  suhdi- 
vision  of  property,  are  also  a  reminder  of  the  time 
when  the  i.  j  was  the  only  highway.  As  Parkman 
said,  "One  coidd  have  seen  nearly  every  house  in 
Canada  hy  paddling  i  canoe  up  the  St.  Lawrence  and 
the  Richelieu." 

The  activity  of  the  fur  trader  and  the  zeal  of  the 
missionary  opened  up  the  route  to  the  Upper  Lakes, 
hy  way  of  the  Ottawa  River,  Lake  Nipissing  and 
Georgian  Ray,  which  was  an  old  warpath  route  of 
the  Iroquois.  The  direction  of  French  settlement 
and  trade  in  Canada  was  fashioned  hy  the  location  of 
the  Ottawa  and  of  the  St.  I^awrence. 

With  the  settlement  of  the  United  Empire  Loyal- 
ists in  T^ppe:  Canada,  177.5-1787,  the  St.  Lawrence 
and  Luke  Ontario  obtained  an  added  importance. 
Gradually  settlement  f^^e^i  h\  the  country  between 
Kingston  and  Lake  St.  Clair.  The  trade  importance 
of  the  lake  and  river  route  was  early  recognized  and 
plans  for  the  construction  of  canals  around  the  ob- 
structed sections  of  the  St.  Lawrence  were  de^  jloped. 
ISIerritt  saw  that  the  construction  of  the  AVelland 
Canal  would  unite  the  route  from  Lake  Ontario  to 
Lake  Huron.  The  Lachine  Canal,  the  other  St.  Law- 
rence canals,  the  Ottawa  canals,  the  Rideau  canals  all 


CANADIAN  THANSPORTATION 


8 


Iwar  oil  the  jiositioii  whith  was  taken  by  Colonel  Uy 
in  1820  when  he  stated  that  the  eonstruelion  of  an  iin*- 
proved  waterway  from  the  l/pper  \akes  hy  way  of 
the  St.  Lawrenee  to  the  sea  wonid  attract  the^rowin^^ 
trade  of  the  western  territory  of  the  Tnited  States  to 
a  Canmlian  route,  thereby  assisting  in  building  up  the 
Canadian  towns  alon^  that  route  and  inereasin^  the 
shippini^r  und  export  trade  of  Canada. 

2.  Improved  li if/IiK a i/s.— While  the  waterwa\  s  ta- 
eilitated  settlement  atid  permitted  lumbering  to  be 
carried  on,  the  development  of  a^ricidture  was  de- 
i.»endent  upon  imjjroved  roads.     Koads  were  neees- 
sary  if  the  country  was  to  have  width  instead  of  mere 
length.    Roads  were  necessary  if  there  was  to  be  any 
adequate  organization  of  government.     One  of  the 
first  acts  of  the  first  Parliament  of  l^pi)er  Canada  wa 
concerned  with  highways.     Soon  the  j)olicy  of  con- 
structing "(Jrand  Trunk"  roads  was  launched.     In 
Upper  Canada,  Yonge  Street  leading  from  Toronto 
to  Lake  Simcoe,  the  Dundas  Road  and  the  Talbot 
Road  were  undertaken.     A   similar  policy  of  con- 
structing Grand  Trunk  roads  was  followed  in  the 
maritime  provinces.     Ry  1885,  Xew  Rrunswick  had 
roads  radiating  from  St.  John  to  Miramicbi,  St.  An- 
drews and   Fredericton.     In  Lower  Canada   roads 
were  constructed  to  connect  with  the  United  States 
frontier. 

The  improved  highways  played  their  part  in  the  de- 
velopment of  trade.  With  the  opening  up  of  Yonge 
Street,  the  Xorth  West  Fur  Company  diverted  its 


r-trmti,  -a*    ••• 


! 
|i 

I     if 


l:t 


*  INLAND  TRAFFIC 

cargoes  from  the  Ottawa  to  the  St.  Lawrence,  Lake 
Ontario,  and  this  new  liighway.  The  importance  of 
this  early  stage  in  the  transit  trade  across  Canada  is 
seen  in  the  fact  that  British  goods  which  thus  found 
their  way  to  :Mackinaw  were  thence  distributed  as  far 
south  as  the  Spanish  settlements  at  the  mouth  of  the 
^Mississippi. 

While  the  construction  of  plank  roads  in  the  County 
of  York  in  Upper  Canada  increased  the  values  of  the 
lands  located  along  them  50  per  cent,  the  disadvan- 
tages of  the  existing  system  of  transportation  were 
seen  in  the  prices  of  agricultural  commodities.     Near 
St.  Thomas,  at  one  time,  eighteen  bushels  of  wheat 
were  exchanged  for  a  barrel  of  salt,  while  one  bushel 
of  wheat  was  given  for  a  yard  of  cotton.     The  de- 
pendence of  ^Montreal  on  water  communication  and 
winter  roa  Is  was  such  that  as  late  as  1851  the  cost  of 
food  and  fuel  doubled  while  the  ice  was  forming  on 
the  river.     The  movement  of  freight  was  slow  and 
expensive.     From  the  townships  of  Innisfil  and  Ves- 
pra  in  the  County  of  Simcoe,  it  cost  7^d    per  bushel 
to  convey  wheat  to  Lake  Ontario.     From  Laprairie 
to  St.  Johns,  a  distance  of  fourteen  miles,  it  took  a  day 
to  haul  three  barrels  of  ashes  in  a  cart  drawn  by  two 
horses.     Stage-coach    movement    had    ecjual    draw- 
backs.    Between  :Montreal  and  St.  Hyacinthe,  a  dis- 
tance of  thirty  miles,  it  took  a  stage-coach  twelve  to 
'  lurs  in  the  fall  and  spring  to  make  the 


teen 


journev 


CANAUIAN  TnANSPORTATION  8 

3.  The  fint  /w/Z/w/A-.-Agitation  in  favor  of  rail- 
roads began  as  early  as  1824.     At  this  early  period 
«o  projects  engaged  public  attention,  one  for  a  line 
Iron.  CiueLee  to  St.  Amirews.  New  Brunswiek,  the 
other  from  .Montreal  to  Lake  Chan.plain.     The  first 
I-rojeet  went  no  further  than  a  survey,  and  further 
progress  was  stopped  by  the  <lispute  over  the  boun.l- 
ary  Mween  New  Brunswiek  and  Maine,  as  the  line 
ran  hru  the  area  in  controversy.     The  second  project 
resulted  ,n  the  .ormation  of  the  Chan,plain  ami  St 
Lawrence  Railroad.     Work  was  begun  in  1832  but 

TI^ZL^^'^  ''""■   '"  ''''  ^"'^  ~'"' ''""  ^  '™^*'' 

After  the  Rebellion  of  ,837  the  maritime  provinces 
we.e  occupied  ch.efly  in  the  building  of  small  roads 
ies,gned  as  parts  of  a  system  linking  up  the  sea- 
boa.-d  provmces  with  interior  Canada  and  with  the 
United  States.  Before  the  formation  of  the  Domin- 
ion these  provinces  had  taken  an  active  nart  in  railwav 
construction,  and  341  miles  of  road  bad  been  built 
f»onie  stretches  of  road  had  been  built  bv  the  Govern- 
nieiit  and  some  of  the  roads  had  been  operafe.l  bv  the 

m  18<,4  all  fhe  roads  were  in  private  hands. 

i.limhomh  nndvr  aunrautee  Act.~As  elsewhere 
tlie  beginnings  of  the  railroad  systems  of  the  interior 
provinces  were  fragmentary,  tapper  Cana.la  was  at 
the  ou  set  more  lavish  in  granting  charters  than  Lower 
tanada.     In  ,ts  desire  to  open  up  the  agricultural 


6 


INLAND  TRAFFIC 


i  i 


(listnVt  between  Lake  Krie  uiul  Luke  Huron,  l^pper 
Canada  had, as  early  as  18;}7,K'anted  eharters  to  no 
less  thafi  three  parallel  lines. 

'Iiiere  were  fil'ty-four  miles  of  railroad  in  existenee 
in  IHP.)  when  hy  the  (inarantee  Aet  the  ^'overnment 
undertook  to  guarantee  interest  on  the  bonds  of  rail- 
road eoin|)anies.  This  eneoura^enient  was  tiot  to  be 
exte!ided  to  any  lailroad  less  than  seveiity  miles  in 
leno-th.  The  outgrowth  of  this  le'>islation  was  the 
eomparatively  early  appearanee  of  two  systems  whieh 
dominated  the  railway  fiehl. 

The  Great  Western  was  oj)ene(l  in  January,  18.)4, 
altho  there  still  remained  eonsiderable  work  to  be  done 
in  euttino-  and  in  ballastinir.  In  the  previous  year  the 
road  had  a  projeeted  mileage  of  311  miles  of  whieh 
23.>  miles  were  under  construetion.  The  latter  in- 
cluded routes  from  Ilann'lton  to  London,  London  to 
Detroit,  Hamilton  to  the  Niagara  River  and  Junction 
to  Gait. 

More  ambitious  were  Tie  i)lans  of  the  Grand  Trunk 
whose  prospectus  was  issued  in  18.).'}.  The  first  sec- 
tion of  the  road  from  Montreal  to  Brock ville,  12.> 
miles,  was  completed  in  Xovember,  185.7.  The  first 
thru  train  between  Montreal  and  Toronto  made  the 
journey  on  October  27,  18o0. 

5.  Period  of  great  raihcn/f  development.— This 
Srcat  railway  activity  in  l^pper  Canada  took  place  in 
a  period  of  great  commercial  acti\  ity.  Altho  some 
of  the  projects  were  not  completed  before  1860,  the 
bulk  of  the  construetion  was  over  by  18.56.     The  im- 


CANADIAN  TRANSPORTATION 


I 


mediate  effect  of  this  cessation  was  disastrous.  The 
payments  of  railway  contractors  had  hahituated  peo- 
ple to  a  free  flow  of  money;  now  came  restriction  at  u 
time  when  the  l»rovi!ice  had  heen  rapidly  increasin^r 
its  expenditures.  In  18.34  there  was  a  surplus  of 
$3,000,000;  in  18,38,  a  deficit  of  $3,7.30,000.  The  Cri- 
mean \Var  had  raised  prices.  The  changed  conditions 
coupled  with  i  e  had  harvest  pressed  with  especial 
rigor  on  the  farmers. 

S[    adative  conditions  had  detrimentally  affected 
the   (Jrand   Trunk   from   the  outset.     Construction 
costs  had  increased  and  sufHcient  care  had  not  always 
heen  taken  in  construction  work.     The  niistakes  of 
construction  were  in  part  inseparahle  from  construc- 
tion under  new  and  untried  conditions.     The  (irand 
Trunk  had  also  to  meet  a  wasteful  and  ruinous  cof*i- 
l)etition  from  the  (ireat  Western  which  paralleled  its 
route  for  a  distance  of  230  miles.     Furthermore,  the 
(rrand  Trunk  had  water  competition  to  face.     When 
the  main  line  was  surveyed  the  route  chosen  lay  near 
the  leading  water-courses.     It  soon  developed  that  the 
railwax'  could  not  compete  successfullv  with  water 
carriers,     l^etwccn  Montreal  and  Queliec  it  was  ad- 
mittedly impossible  for  the  railway  to  compete  for 
heavy  traffic  which  was  carried  by  water  a  distance  of 
180  miles  at  $1.00  a  ton. 

C.  Government  loan,s  to  Grand  Tntnk.—Thi^  first 
issue  of  the  stock  of  the  Grand  Trunk  had  been  sub- 
scribed twice  over.  By  18.35,  however,  the  road  found 
that  it  could  not  obtain  money  except  at  ruinous  dis- 


8 


INLAND  TRAFFIC 


counts.  Tlie  Government  loaned  the  railway  £900,- 
000  and,  in  185G,  postponed  its  lien  for  grants  already 
made  until  certain  bonds  had  been  issued  for  improve- 
ments. In  the  next  year,  the  government  again  post- 
poned the  lien  until  a  six  per  cent  dividend  on  conmion 
stock  was  earned. 

7.  Other  railway  construction. — During  the  period 
between  1849  and  1867,  in  addition  to  the  railway^ 
already  referred  to,  there  were  sixteen  others  con- 
structed. A  comparison  of  the  completed  railway 
mileage  for  two  of  the  years  within  this  period,  1853 
and  1800,  shows  the  rapid  growth  whicii  was  attained. 
In  the  former  year  the  completed  mileage  was  205 
miles,  as  against  1,895  miles  in  the  later  year.  Of  the 
mileage  of  18C0  the  Grand  Trunk  had  the  largest 
share,  830  miles,  followed  by  the  Great  Western  with 
331  miles. 

In  1807,  the  year  of  Confederation,  the  different 
colonies  now  grouped  under  the  name  of  Canada  had 
2,529  miles  of  railway  which  had  cost  in  round  num- 
bers $160,000,000.  Of  this  sum  the  different  colonies 
had  contributed  approximately  37  per  cent. 

8.  Intercolonial  Raikcai/. —The  establishment  of 
the  Dominion  in  1867  brought  new  factors  into  the 
railway  field.  Despite  early  discouragements  the 
maritime  provinces  had  not  given  up  the  effort  to  se- 
cure rail  conpcolion  with  the  more  inland  provinces. 
It  was  their  hope  to  make  Halifax  the  chief  port  of 
Canada.  During  the  earlier  period  of  its  history  the 
Intercolonial  Railway  was  known  as  the  Halifax  and 


CAXADIAN  TRANSPORTATION  9 

Quebec.  The  aid  of  the  Imperial  tfoverniuei.t  ha<l 
been  sought  for  the  project  au.l  a  guarantee  bad  been 
extended. 

The  maritime  provinces  insisted  as  a  condition  of 
then-  entrance  into  the  Confederation  tiiat  the  railway 
should  be  constructed  at  the  expense  of  the  New  Do*- 
niimon,  and  tliis  insistence  found  its  acceptance  in  the 
Quebec  Resoh.tions  of  1864,  which  became  tlie  l,asis 
ot  :i.e  British  A orth  America  Act.  This  act  provided 
m  section  14,5:  ^ 

New  B;"nti!.l  11"  '''^"^'"r^  "^  ^'-^^«'  ^^-a  Scotia  and 
rstw  lirunsmck  have  joined  in  a  Declaration  that  the  Con- 

r„"  l°r.°^  *''i^  Intercolonial  Railway  is  essent  a  o  tl^ 
Consohdation  of  the  Union  of  British  North  An.eric^  and 
to  the  Assent  thereto  of  Nova  Scotia  and  New  Bruns«^ck 
and  have  consequently  agreed  that  Provision  shouldr^mSe 
for  Its  ^mediate  Construction  by  the  Governin.nt  o    Can- 

ff     h  Ji  rluV  "'''^"'*  *°  ^'^'^  ^«"^'^'t  to  that  Agreement 
It  shall  be  the  Duty  of  the  Governn.ent  and  ParhW  of 

S"  H  ^r-^'^V'^'*  *'"  Commencement  within  Six  Months 
•  K  M  V':^."'"".  "f  ^  R^"'^-a  V  connecting  the  St.  Lawre  ce 
stnL  ?K-'  °f,"!^f-^'  '■"  ^'ova  Scotia^,  and  for  the  CW 
s  ruction  thereof  without  intermission,  and  the  Conmkt^on 
thereof  with  all  practicable  Speed.  ^onipkt.on 

0.  Comtruction  and  operation. -The  road  .vas  as- 
s.ste(l  from  the  proceeds  of  a  Dominion  loan  guaran- 
teed  by  the  Imperial  Government.  Two  routes  were 
poss.b le-eithcr  a  along  the   boundary  of  the 

I  n.ted  States  or  a  .  .  northeiv,  and  more  circuitous 
route.  I  or  political  and  military  reasons  the  lono-er 
route  was  chosen.  ° 

Railways   previously   constructed   at   government 


10 


INLAND    TRAFFIC 


cost  in  the  maritime  provinces  which  were  constituent 
parts  of  the  system  were  declared  to  be  the  property  of 
the  Dominion.  Construction  work  was  completed  in 
1876  and  at  that  tim.  714  miles  were  in  operation 
which  had  been  constructed  at  a  cost  of  $34,363,890. 
By  the  acquisition  in  1879  of  the  Riviere  du  Loup  ex- 
tension of  the  Grand  Trunk,  the  Intercolonial  ob- 
tained a  western  terminus  at  Chaudiere  Junction 
By  leases  and  by  traffic  agreements  it  obtained  in  1898 
entrance  into  Montreal. 

The  Intercolonial  showed  a  deficit  for  the  fiscal  year 
1915.  Five  years  later  this  deficit  had  grown  to  over 
six  niillion  dollars,  it  operating  ratio  being  113  per 
cent.  The  government  railroad  has  never  paid  the 
interest  on  the  investment.  The  system  was  built  as 
a  political  work  and  any  attempt  to  put  it  on  a  basis 
of  reasonably  remunerative  rates  has  evoked  refer- 
ence to  its  origin.  It  has  the  disadvantage  of  a  cir- 
cuitous route,  248  miles  longer  between  Montreal  and 
St.  John  than  the  Canadian  Pacific. 

10.  Companson  of  Grand  Trunk  with  Great  West- 
ern Railway. —As  the  two  important  railroads  in  the 
Canadas,  both  the  Grand  Trunk  and  the  Great  West- 
ern were  competitors  for  the  transit  trade  across  the 
western  peninsula  of  Upper  Canada  between  the  east- 
ern and  western  States.  The  Great  Western  was  the 
more  favorably  located,  since  the  Grand  Trunk  had. 
in  addition  to  its  line  in  this  section,  a  line  in  the  East 
which  produced  very  little  business.  From  Toronto 
to  Quebec  the  Grand  Trunk  paralleled  Lake  Ontario 


I 

IP 


CANADIAN  TRANSPORTATIOX  n 

freight  .„•  „.  we 't  :  L  *:^,.  "    Z^T ^""'1 
Trunk  ,,nd  fou.-  ti.nes  .he  „,iC  J-^  G    ^  U'::' 
tern  a  large  part  of  it.  tribntary  eountrv      L   „" 
A    on,pa.-^on  of  the  net  earningi  of  the  two     i,  :    ^ 

11.  G™„rf  Tnnik  absorb.  Great  Wester,,  -From 

without  success    amJ  in  ih-tt  ^^^"'P^ea  m  1876 

iiccc!»s,  ana  in  1877  an  am-eenient  fm-  +1,^ 

,^-:  ('rand  Ti;i„kacf/iiirc.t  other  linn       \tti,    i 
gmn  ng  of  1884  the  r,-„„l  r       i     '""^f-     ^t  the  l)e- 

he  Midland  «h,eh  gave  it  a  connection  hctween  the 
•■pper  and  lower  Lakes.  It  was  expected  tint  th! 
;""';"  «.ve,  in  con.hination  with  the  G,    .IT  .It 

.ne  Atlantic.  Some  tour  years  later  the  Gr-,nH 
-.nk  acquired  control  of  theHamilton  ,  Xor"h 
"extern,  and  the  Northern,  the  joint  systen,  cm- 


18 


IXLAXI)  TRAFFIC 


bracing  403  miles.  As  a  result  of  construction  and 
accjuisition  between  1881  and  1890  practically  all  rail- 
way mileage  in  Ontario,  with  the  exception  of  that 
controlled  l)V  American  interests,  was  subdivided  be- 
tween  the  Grand  Trunk  and  the  Canadian  Pacific. 

13.  Trunscont'wentul  line. — The  next  step  in  Cana- 
dian railway  history  grew  out  of  the  demand  for  a 
transcontir\ental  line.  Such  a  line  had  been  projected 
at  a  very  early  date,  but  actual  construction  was  de- 
layed until  1872.  In  the  previous  year  British 
Columbia  had  entered  the  Confederation,  and  as  a  con- 
dition of  so  doing  had  insisted  upon  the  building  of 
a  transcontinental  railway. 

Backed  by  the  prospect  of  a  land  grant  of  50,- 
000,000  acres  and  a  cash  subsidy  of  $30,000,000,  con- 
struction was  begun  as  a  private  work  in  1872.  The 
Imperial  Government  had  guaranteed  interest  at 
four  per  cent  on  a  loan  in  aid  of  the  Canadian  Pacific 
and  the  improvement  of  the  Canadian  canals.  The 
construction  of  the  work  proceeded  slowly  during  a 
period  of  industrial  depression.  Political  changes 
made  the  outcome  of  the  work  problematical. 
Further  efforts  were  made  to  obtain  credit  from  the 
Imperial  government.  Failing  in  this  appeal  an 
endeavor  was  made  to  have  the  Grand  Trunk  under- 
take the  work,  but  without  success. 

14.  Canadian  Pacific  to  build  and  operate  line. — 
The  Government  was  successful  in  1880  in  making 
an  arrangement  with  the  Canadian  Pacific,  vndicate 
to  construct  and  to  operate  the  line.     The  syndicate 


lit, 


CANADIAN  TRANSPORTATION 


l!J 


undertook  to  complete  the  work  in  ten  years  from  the 
date  of  contract.  The  Company  was  to  receive  $2.),- 
000,000  in  cash  and  25,000,000  acres  of  land  in  the 
Northwest.  The  railway  and  its  capital  were  to  l;c 
exempt  from  taxation— dominion,  provincial  and 
municipal.  The  land  ^n-ant  was  to  he  free  fron  taxa- 
tion for  twenty  years  from  the  time  of  the  grant  hy 
the  Crown.  In  addition,  the  (iovernment  gave  the 
713  miles  of  railway  which  were  in  part  constructed 
and  in  part  under  contract. 

The  new  company  was  incorporated  on  P'el)ruary 
17,  1881.  Construction  work  hegan  in  June  of  the 
same  year  and  the  last  rail  was  laid  Xovemher  7,  188.>, 
the  line  being  opened  for  thru  traffic  on  June  28,  188(J. 
The  railway  was  thus  constructed  in  one  half  the  tim^i 
stipulated  in  the  agreement. 

15.  Eastern  con nccfiom:— The  original  charter 
provided  for  a  road  from  Callander  near  Lake  Xipis- 
sing  to  the  Pacific  coast.  It  authorized  the  company 
to  obtain  a  connection  with  the  city  of  Ottawa  thru  tiie 
acquisition  of  the  Canada  Centriil  Railway  and  also 
empowered  it  to  "hold  and  operate  a  line  or  lines  of 
railway  from  the  city  of  Ottawa  to  any  point  at 
navigable  water  on  the  Atlantic  seaboard!  or  to  an 
intermediate  point,  or  it  may  acquire  running  powers 
over  any  railway  now  constructed  between  Ottawa 
and  any  such  point." 

Before  actual  operations  began,  the  Canada  Cen- 
tral and  some  other  lines  had  been  acquired.  Friction 
^it^i^t|ie^  Grand  Trunk  soon  developed.     The  latter 


14 


IXLAM)  TRAFFIC 


charged  that  the  Canadian  Pacific  was  departing  from 
the  original  plan  and  entering  into  competition  with 
the  C;rand  Trunk.  The  position  of  the  Canadian  Pa- 
cific  was  that  had  it  rested  with  the  completion  of  its 
main  line  across  the  continent  the  enterprise  would 
have  existed  "ordy  as  a  sickly  appendage  of  the  Grand 
Trunk."  The  opposition  of  the  Grand  'i'runk  could 
not  -Tevcnt  the  gradual  expansion  of  the  Canadian 
Pacific  in  eastern  Canada. 

16.  Monopohf  clause  in  Canadian  Pacific  charter, 
--The  policy  of  the  Canadian  Pacific,  according  to 
Sir  John  A.  Macdonald,  in  discussing  the  charter  of 
the  railway,  was  to  confine  trade  to  the  Canadian 
side  of  the  hor-^er  and  to  huild  up  ^Montreal,  Quebec, 
Toronto,   Halifax  and   St.  John  by  means  of  one 
Canadian  line.     To  this-  end  there'  was  included  a 
monopoly  clause  in  the  legislation  which  provided  in 
substance  that  to  preclude  the  traffic  of  the  Northwest 
from  being  tapped  by  American  carriers,  for  twenty 
years  after  the  enactment  of  the  charter  legislation 
no  railway  should  be  chartered  within  fifteen  miles  of 
the  international  boundary.     And  the  Government 
undertook  to  maintain  this   prohibition  within  the 
period  stated  in  the  case  of  any  provinces  created  in 
the  future  in  the  Northwest. 

17.  Traffic  facilities  for  western  wheat  areas.— The 
wheat-belt  of  the  Canadian  Northwest  begins  about 
400  miles  farther  west  than  the  r  ^ern  limit  of  the 
wheat-belt  of  the  American  Nortnwest.  Compara- 
tively little  local  traffic  offers  between  Winnipeg  and 


CA  N  A  DI A  \     I'll  A  N  S  I»(  )U'rA  TI()\ 


1ft 


Fort  Willi 


Tlu 


illiain.  iiie  L anaduiii  I'acitic  line  ar  iiid  me 
head  of  huke  Superior  is  essentially  a  traffie  hridire 
It  has  been  double-traeked  for  VM).:ii  miles,  or  ;j.>  per 
cent  of  a  total  distanee  „f  .5.51).J)  n.iles  fion.  Honiford 
the  eonneetion  will,  the  Toionto-Sudluirv  Hrar.eh  to' 
Tort  William.  'I'his  will  enhance'  its  haulage  eapae- 
ity.  With  its  sin^de-line  faeilities,  it  handles  between 
the  elose  and  the  (jpeni..^-  „f  navigatiim  as  mueh  as 
the  lake  boats  handle  in  ten  days. 

The  development  of  mining 'aetivitv  in  Southern 
British  Columbia  led  to  the  subsidizing,  in  1H<)7  „f 
the  Crow's  Nest  Pass  extension  of  the  Caiuulian 
Paeifie.  This  line  was  granted  a  subsidy  of  $ll.()()o 
per  mile  to  eonstruet  a  -ailway  from  I.ethbridge  to 
Nelson,  a  distanee  of  im  miles,  thus  affording  a  eon- 
neetion with  the  Kootenay  Lakes. 

18.  Snbfddj/  prov'mom  for  Canadian  Pacific—It 
was  part  of  the  foregoing  subsidy  agreement  witli  the 
Canadian  Paeifie  that  the  rates  on  this  line  should  be 
subject   to  the   revision  of  any   regulative   tribunal 
thereafter  ereated.     When  the  Canadian  Paeifie  was 
chartered,  the  general  railway  law  contained  a  pro- 
vision  that  rates  might  be  regulated  by  Parliament, 
but  so  as  to  i)roduce  a  return  of  not  less  than  1.5  per 
cent  on  the  capital  actually  exi)ended.  In  the  Cana- 
dian Pacific  charter,  10  per  cent  was  set  as  the  mini- 
mum; this  was  represented  as  an  extension  of  the  reg- 
ulative power  of  Pai.ament.  However,  in  the  revision 
of  the  Railway  Act  of  1888.  the  1.5  per  cent  clause  was 
struck  out  and  the  10  per  cent  clause  remained  in  the 


16 


INLAND    THAFFIC 


Canadian  PudHi*  charter,  lliiis  exempting  its  rates 
from  reduction  until  this  figure  was  reached.  It  was 
now  made  a  condition  of  the  suhsidy  that  re(hictions 
of  from  10  |,er  cent  to  .TJ',  per  cent  should  he  made 
on  specified  commoihties  moving  over  the  main  line 
of  the  Canadian  Pacific. 

10.  The  MacKcnzk  ami  Mann  railtoai/n. — In 
Manitoha,  the  al)rogation.  in  1888,  of  the  "monopoly" 
clause  had  heen  followed  hy  the  entrance  of  the 
Northern  Pacific  into  AViimij)eff.  rate  concessions  also 
having  heen  obtained.  The  desire  for  a  lower  rate  to 
the  Lakes  remained  unsatisfied.  In  1800,  MacKenzie 
and  Mann  obtained  the  charter  of  the  Lake  Manitoba 
Railway  and  Canal  Company,  a  line  which  had  been 
chartered  in  1880  and  which  had  been  voted  a  land 
grant  by  the  Dominion.  They  now  acquired  in  cpiick 
succession  the  charters  of  the  Winnipeg  and  Hudson's 
Bay,  the  Manitoba  and  the  South  Eastern,  the  On- 
tario and  Rainy  River,  and  the  Port  Arthur,  Duluth 
and  Western.  In  1808,  the  Greenway  administra- 
tion, which  had  thought  of  obtaining  an  independent 
outlet  from  ^Manitoba  to  Duluth,  decided  to  assist 
l)y  a  bond  guarantee  the  Mackenzie  and  Mann  line 
to  Port  Arthur.  The  consolidation  of  these  different 
properties  now  created  the  Canadian  Northern  Svs- 

« 

teni. 

20.  Cnnndinu  Northcru  acquired  Northern  Pacific 
Lhies'  h  Manitoba.  In  1001,  the  Manitoba  govern- 
ment took  over  on  a  000-year  lease,  at  a  payment  of 
$300,000  a  year, the  354  niiles  of  the  Northern  Pacific 


CANADIAN  TRANSPOHTATION  17 

within  Manit„ba.     Thereafter,  these  lines  were  turne.I 
over  to  the  C'ana.lia.i  \„rther„  whieh  assumed  the 
''"Hens  under  the  lease.     The  ( iovernn.er.t  nov  guar- 
anteed interest  on  the  hcnds  oi'  the  C'ana<han  North- 
cm    hetween    Winnipeg    and    I»<,rt    Arthur.     The 
^^unad.an     Northern    engaged    to    give    reductions 
a.nour.t,    .  t<>  15  per  eent  of  its  tariff  rates  then  in 
force  on  articles  other  than  grain,  for  points  in  JNI,,,,- 
itoba  from  and  to  Fort  William  and  Port  Arthur 
I  rov,s.on  was  also  made  for  a  lO-eent  rate  on  grain' 
from    Winnipeg   t(,    I>ort    Arthur.     The    Canadian 
Northern  from  Port  Arthur  was  completed  in  Feb- 
ruary, 1902,  and  in  April  of  the  same  year  the  re- 
duced  rates  were  put  in  effect. 

The  acquisition  of  the  No'rthern  Pacific  hnes  in 
Manitoba  increased  the  Canadian  Northern  mileage 
to  1,240  miles.  By  1903,  its  lines  had  crossed  out  of 
31anitoI>a  into  the  Northwest  territories.  It  has  been 
successful  in  enlisting  the  aid  both  of  the  Dominion 
and  of  the  Provinces.  In  British  Columbia,  it  has 
constructed  its  line  under  a  British  Columbia  charter 
the  hue  being  known  as  the  Canadian  Northern' 
I  acihc. 

21.  The  Grand  Trunk  Pacific  project— On  No- 
vember 3,  1902,  the  Grand  Trunk  brought  before 
the  Dominion  government  a  proposition  for  the  con- 
struction of  a  line  of  railway  from  North  Bav  on  the 
errand  Trunk  system  in  Ontario,  to  the  Pacifie  Coast 
at  or  near  Port  Simpson.  It  was  stated  that  a  second 
tr^inscontmental  railway  was  necessary  in  order  to 


Ki-^.:' 


18 


INLAND  TRAFFIC 


handle  the  expanding  business  of  the  Northwest  and 
prevent  its  detlection  to  American  channels.  A  gov- 
ernment grant  of  $6,4-00  and  5,000  acres  of  land  per 
mile  were  asked  for. 

22.  Terms  of  the  charter. —In  1903,  charter  legisla- 
tion was  enacted.  In  this  legislation,  there  were  es- 
sential modifications  of  the  original  proposition.  In- 
stead of  providing  for  an  eastern  terminus  at  North 
Bay,  access  to  the  Canadian  seaboard  being  obtained 
therefrom  by  means  of  the  lines  of  the  Grand  Trunk 
and  the  Intercolonial,  it  was  now  provided  that  the 
line  was  to  be  continued  east  from  Winnipeg  to  JNIonc- 
ton,  New  Brunswick.  From  Winnipeg  to  the  Pacific 
Coast,  the  Grand  Trunk  Pacific  was  to  build  the  line. 
From  Winnipeg  to  Moncton,  it  was  to  be  built  as  a 
government  work,  under  the  name  of  the  National 
Transcontinental.  The  Government  undertook  to 
guarantee  interest  on  bonds  to  75  per  cent  of  the  cost 
of  construction,  but  not  exceeding  $13,000  per  mile 
on  the  prairie  section  and  $30,000  on  the  mountain  sec- 
tion. The  section  known  as  the  National  Transcon- 
tinental was  to  be  leased  on  completion  to  the  Grand 
Trunk  for  a  period  of  fifty  years ;  the  first  seven  years 
being  rent-free,  three  per  cent  per  annum  on  the  cost 
of  the  work  being  paid  as  rental  during  the  balance 
of  the  time.  The  Government  reserved  the  right  to 
grant  running  rights  over  either  or  both  sections. 
The  Company  agreed  that  all  freight  originating  on 
the  line  of  railway  or  its  branches,  not  otherwise  spe- 
cifically routed  by  the  shipper,  should,  when  destined 


-i;?»:.'?ir-  • 


CANADIAN  TB  \\Si'ORTATIO\ 


19 


for  points  in  Canada,  e  eiiniec.  entirely  thru 
Canadian  territory;  that  the  thru  rate  on  exjjort 
traffic  from  the  point  of  origin  to  the  point  of  destina- 
tion via  Canadian  ports  was  not  to  exceed  that  con- 
temporaneously in  force  by  the  United  States  ports; 
and  that  such  traffic  not  otherwise  specifically  routed 
by  the  shipper  was  to  be  carried  to  Canadian  ocean 
ports. 

The  terms  contained  in  the  legislation  of  11)08  were 
regarded  by  the  Grand  Trunk  management  as  too 
onerous  considering  the  condition  of  the  money 
market  at  that  time.  A  re-arrangement  of  terms 
was  made  early  in  1904.  The  essential  modification 
was  that  in  the  case  of  the  bond  guarantee  on  the 
mountain  section,  the  maxinmm  limit  of  $30,000  was 
removed,  the  government  now  being  liable  for  a  bond 
guarantee  u])  to  three-fourths  of  the  cost. 

23.  Grand  Trunk  shareholders  dissatisfied.— Altho 
the  shareholders  of  the  Grand  Trunk  were  assured  by 
Sir  Charles  Kivers  AVilson  that  "the  Grand  Trunk 
will  be  in  the  very  foremost  rank  for  securing  itself 
an  ample  participation  in  the  rich  traffic  both  east- 
bound  and  westbound  which  will  be  derived  from  the 
cultivation  of  this  vast  area  and  the  requirements  of 
its  constantly  growing  poi)ulation,"  there  was  a 
strong  feeling  among  them  that  the  government  had 
not  been  sufficiently  generous:  and  it  was  not  with- 
out difficulty  that  their  acquiescence  was  obtained. 

24.  Grand  Trunk  Paeifie  becomes  political  issue. 
—In  the  general  election  of  1904,  in  which  the  Lib- 


20 


INLAND    TRAFFIC 


eruls  were  successful,  the  issue  was  the  government 
pohcy  in  regard  to  the  Grand  Trunk  Pacific.  The 
Conservative  leader  reathrnied  his  hehef  in  the  neces- 
sity of  government  ownership,  stating  that  the  peoi)le 
still  had  power  to  rescind  the  hargain,  and  that  if 
popular  sanction  was  gi^•en  to  the  agreement  it  would 
postpone  government  ownershij)  for  a  century.  The 
guarantees  of  an  all  Canadian  route  were  attacked 
as  illusory.  The  Liberal  Leader  said  the  route  to  the 
seaboard  was  necessary  to  make  Canada  independent 
of  American  lines.  He  affirmed  the  necessity  of 
private  ownership,  pointing  out  the  greater  elasticity 
of  private  ownership  in  the  matter  of  development  of 
traffic  and  summed  up  his  j)osition — "Governments 
can  build  railways— I  have  no  fault  to  find  with  that 
— ^but  governments  cannot  operate  railways." 

25.  Government  operation. — As  a  result  of  the  ad- 
verse fortunes  of  the  Grand  Trunk  Pacific,  the  Na- 
tional Transcontinental  is  at  present  operated  by  the 
Canadian  National  system.  It  extends  from  Monc- 
ton  to  Winnipeg,  embracing  a  mileage  of  1,993  miles, 
which  have  cost  $lo2.802.74(5,  or  an  average  of  $76,- 
G69  pel-  mile.  For  the  calendar  year  1920  it  had  an 
operating  ratio  of  170.1  per  cent. 

26.  Other  s^^/fif em s.—Since  1899,  the  Great  North- 
ern system  h^is  built  up  a  mileage  in  Canada  of  ap- 
proximately .500  miles.  AVhen  the  Crow's  Nest  Rail- 
way was  chartered,  there  was  a  strong  desire  in  British 
Columbia  for  a  railway  direct  from  the  Kootenay  to 
the  coast,  which  would  not  only  tap  the  mineral  re- 


'.>''*■!'  ii 


J9'' 


C^ 


^:^^^ 


$^tel<i£:%JK-;^^MiiMyib^;^ 


CA  NADIAX  TRAXSPORTA  riON 


21 


sources  of  the  Kootenays  hut  also  develop  the  country 
west  of  this  to  the  Pacific  coast.     It  was  iu  the  h:te 
nineties  that  James  J.  Hill  hegan  to  a])i)reciate  the 
growin^r  trade  of  liritish  Cohinihia.    In  the  endeavor 
to  ohtain  an  entry  into  Vancouver,  tlie  charter  of  the 
Vancouver,  Victoria  ajid  Eastern  was  ohtaincd;  and 
hy  means  of  this  and  other  controlled  lines,  an  en- 
trance was  made.     At  the  end  of  1928,  this  road  was 
operating  over  ahout  HM)  nn"les  of  track.     Its  con- 
struction in  British  Columhia  has  heen  effected  hy 
the  huilding  of  short  links  connecting  with  the  Iliil 
system  in  the  United  States.    These  li,nes  also  extend 
into  Manitoha,  to  Bran  nd  to  Winnepeg. 

Other  lines  which  wci  uter  constructed  in  the 
Western  provinces  are  the  Edinonton,  Dunvegan 
aiid  British  Columhia  Railway,  extending  over  350 
miles  northwest  of  Edmonton,  Alherta;  the  Pacific 
Great  Eastern  extending  a  sinu'lar  distance  from 
Squamish  to  Quesnal,  British  Columhia  and  the  Al- 
herta and  Great  AVatei-ways  Kailway  from  Edmon- 
ton to  Waterways,  Alherta,  a  distance  of  290  miles. 
The  province  of  Ontario  owns  and  operates  the 
Temiscann'ng  and  Xorthern  Ontario,  which  extends 
from  North  Bay  to  a  junction  with  the  National 
Ti-anscontinental  at  Cochrane.  This  system  has  now 
a  mileage  of  three  hundred  and  twenty-nine  miles  and 
was  huilt  at  a  cost  of  twenty  million  dollars. 

27.  RaihiMif  As.sociaiioN. — 'i'he  necessity  of  a  uni- 
fied treatment  of  conunon  transportation  needs  led 
to  the  organization  on  Octoher  2.'Jd.  1917,  of  the  l\)d\ 


22 


INLAND  TRAFFIC 


t_trv 


now  known  as  the  Railway  Association  of  Canada. 
During  the  war  this  organization  gave  added  trans- 
portation efficiency  and  was  highly  indorsed  by  the 
Prime  ^Minister  in  a  speech  to  Parliament  in  May, 
1918,  He  commended  the  organization  for  securing 
fuel  conservation  thru  reduced  })assenger  service  and 
heavier  loading  of  freight  cars,  increasing  the  move- 
ment of  freight  and  bv  increasing  efficiency  thru  im- 
proved  handling  and  loading. 

Since  the  close  of  the  war  this  organization  has  been 
largely  engaged  on  such  questions  as  standardization, 
wage  schedules,  car  servic^  idministration,  passen- 
ger transportation,  tariffs  and  statistics,  materials 
a.id  supplies.  It  forms  one  of  a  group  of  organiza- 
tions which  comprise  the  Employment  Service  Coun- 
cil of  Canada,  the  purpose  of  which  is  to  advise  the 
Minister  of  Labor  in  the  administration  of  the  Em- 
ployment Offices  Coordination  Act  and  to  recom- 
mend means  for  preventing  unemployment. 

28.  E^rpansion  of  the  Govern m cut  railway  syfitem. 
—The  loan  made  to  the  Canadian  Northern  in  191  ei 
which  is  referred  to  later,  did  not  terminate  its  diffi- 
culties. In  view  of  the  conditions  and  necessities  of 
railway  development  in  Canada,  a  special  Commission 
was  appohited  in  July,  1916,  to  make  a  general  stock- 
taking. The  Commission  was  to  report  on  the  gen- 
eral problem  of  transportation  in  Canada;  the  status 
of  the  transcontinental  railways  with  a  view  to  their 
transportation  and  tinancial  conditions  and  possibili- 
ties of  traffic  development ;  the  question  either  of  their 


CANADIAN  TRANSPORTATION  23 

reorganization  or  acquisition  by  the  State;  and,  mn- 
erally,  all  other  matters  deemed  relevant. 

The  Commission  was  to  be  constituted  of  A    II 
Smith,  of  the  New  York  Central;  Sir  H.  L.  Drayton 
Chan-man  of  the  Board  of  Railway  Conmiissioners 
tor  Canada;  and  Sir  George  Paish.     As  the  latter 
was  unable  to  act,  his  place  was  taken  by  ^Y.  M 
Ac  worth. 

Two  reports  were  presented  in  April,  1917.'  ]yir. 
Smith  in  his  minority  report  recommended  a  regional 
reorganization.     He  said: 

Let    the    Canadian    Pacific    alone;   let   the   Grand   Trunk 

Canadian  Northern;  et  the  Canadian  Northern  operate 
tl,e  western  I.nes,  now  i,eld  by  that  con,pany  and  the  Grand 
I.unk  Pacific  system;  let  the  Government  operate  the  con- 

mnie?'    "''    ^"'''"''''    *'''''''    "P^'^^*'""    ^y    P"-'''^^^    ^om- 

It  was  recognized  that  in  carrying  out  this  scheme 
turther  Government  aid  might  be  necessary. 

The  majority  report,  known  as  the  Dravton- 
Acworth  Report,  reported  against  the  idea  of  direct 
(rovernment  ownership  and  operation.  It  recom- 
mended the  creation  of  a  Roard  of  Trustees  to  be 
known  as  the  Dominion  Railway  Company.  To 
this  was  to  be  transferred  the  managen.ent  'of  the 
Canadian     Xorthern,     GrnTid     Trunk     and    Grand 


1  The  reports  contni 


way  situation.     A  kn' 


standing  of  the  existing  sitnat 


much 
'wiedge  of  them  is  ahsohitely  essentiafto  anunder- 


vahiat)le  information  i)earing  on  the  rail- 


lon. 


24 


INLAND  TRAFFIC 


J- 


Trunk  Pacific.  It  was  also  recommended  that  the 
Jnterc()h)nial  and  National  Transcontinental  should 
be  transferred  to  this  body.  These  railways,  so 
transferred,  were  to  be  operated  as  a  united  system 
on  a  commercial  basis,  under  the  politically  undis- 
turbed manaf?ement  of  trustees  "on  account  of,  and 
for  the  benefit  of  the  people  of  Canada."  The 
trustees  appointed,  in  the  first  instance,  by  the  Gov- 
ernment were  to  be  self-perpetuating.  In  sum,  the 
system  was  to  be  under  independent  commercial 
cjrganization  with  the  Dominion  in  the  position  of 
financial  guarantor. 

The  (irand  Trunk  Pacific  Railway,  after  receiving 
heavy  advances  from  the  government  during  tlie 
years  1916  to  1918,  went  into  the  haiuls  of  the  receiver 
on  IVIarch  9,  1919,  the  Minister  of  Railways  being 
appointed  as  receiver.  The  road  was  »perated  sep- 
arately for  a  time  but  in  October,  1920  the  manage- 
ment was  transferred  to  the  Canadian  National  Rail- 
ways which  has  operated  it  since  that  time. 

The  Grand  Trunk,  having  been  relieved  of  the 
(»rand  Trunk  Pacific,  asked  the  government  to  take 
over  tile  parent  organization.  Negotiations  extend- 
ing from  early  in  1918  until  October,  1919  resulted 
in  legislation  for  the  sale  and  purchase  of  Grand 
Trunk  stock.  Three  arbitrators  were  appointed  and 
an  award  was  made  September  7,  1921.  The  major- 
ity of  the  committee  held  that  the  preference  and 
conmion  stock  of  the  Grand  Trunk  had  no  value. 


f^ 


i 


CANADIAN    lUANSl'OlnAlIov 

mj  Counal  an.l  ,I,s„.i.ss«l  l,y  i.  „„  j,.,,.  .«    ,,,,., 
"itc.l  States,  wh.le  govcrn„„,nt-„w,K.,|.  uct  „,„I,.,. 

tin  . nig  .-,11(1  the  Government  not  I.eini;  inclined  to 
-ke  further  a.lvnnees,  it  wa.  ,,eci,Ie,l  i.No"^  tolak 
er  the  nulway.     provision  was  ma.le  for  the  ac 

Te  r      ,  * "  ^"''•'  ""'•  "'-^  -letermination  of     s 
jalue  by  arh.trat.on.    An  award  was  n.ade  in  mJJ 

29.  CmuuJian  National  Sa!l,ca>,  S.vxtcr>.~A  tem- 
porary organisation  was  effeeted  in  September  ,9  8 

s  "elTent"t    "'^"';'"■•■'•T  Sroup.  however,  retaining 
tsjegal  entity  and  attendant  liabilities.    In  Oetober 
J-,  the  Canadian  Xational  C'ompany  was  created 
e  purpose  of  consolidating  the  roads  a.^a      i"^ 

;rr;^:;rTt;er 

H™edandtbeprovisi;.n:d;i.ecf;::^^^^^^^^^^^^^ 
"■ere  has  been  a  stead^- 1^:^;:^^''^:: 


26 


INLAND  TRAFFIC 


the   niiinber  of  railways.      Larger  companies   have 
eliminated  the  smaller  ones  by  absorbing  them. 

The  extent  to  which  concentration  has  developed 
is  indicated  by  the  fact  that,  of  the  total  railway 
mileage  of  .52,;j().)  miles  in  Canada  at  the  end  of 
1923,  the  Cajiadian  National  operated  2o,81()  miles 
and  the  Canadian  Pacific  lO.OOO  miles — between 
them,  over  85  per  cent  of  the  total.  There  were  .3.) 
other  lines  listed,  the  largest  of  which  (the  Canada 
Sonthern)  had  a  mileage  of  8()7.  They  are,  for  the 
most  part,  short-haul  lines  of  local  interest. 

REVIEW 

Why  was  Upper  Canada  more  lavish  in  granting  railroad 
charters  than  Lower  Canada? 

State  the  circumstances  which  led  up  to  the  absorption  of  the 
Grand  Trunk  by  the  Great  Western. 

W'hen  was  the  first  transcontinental  line  in  Canada  projected, 
when  started  ai  i  by  whom  built?  What  part  did  the  Dominion 
plaj'  in  its  construction? 

What  was  the  Monopoly  Clause  in  the  Canadian  Pacific 
charter?     What  subsidy  provisions  did  this  railroad  obtain? 

Discuss  the  Grand  Trunk  Pacific  project.  What  were  the 
salient  points  in  the  charter  granted  to  this  road?  How  were 
they  regarded  by  the  stocklioJders? 

Explain  tlie  sclieme  of  railway  control  proposed  by  the 
Drayton- Acworth  Report. 


7^ 


IW 


ti'''--*,^'*^'!' 


CHAPTKH  II 


THK  COVEUMIKNT  AMJ  TI.K   .IAI(,«AVS 

I.  Sailw„,,co„trol.~The  Unti.sh  X.,rtl,  An.c-ican 
Act  gives  jurisdiction  over  railroads  situatcl  entireiv 
uithin  one  province  to  that  province.  All  other 
roa,ls  are  chartered  and  conlrcllcl  l,v  the  Dominion 
government,  and  the  latter  also  has  the  right  to  .le- 
Clare  any  railroa.l  locatc.l  entirely  within  another 
I.rov,.,ce  to  he  under  Domini,,,,  control,  heeause  the 
railroad  is  for  the  "general  a.lvantage  of  Cana.la." 
1  here  has  heen  an  incresing  tendency  to  expand 

tage  of  C anaila,  and  many  pu,ely  local  ,„a,ls  have 
heen  granted  Dominion  charteis.  Jealousv  hetween 
the  Provincial  governments  and  the  Dominion  gov- 
ernment has  c,-eate.l  some  friction  in  railwav  aff^Iirs, 
hut  tiK.  teiiclency  of  new  enterprises  is  to  .".htain,  if 
l)ossible,a  Dominion  charter  heeause  it  is  l)clieve<l  to 
me  them  a  better  standing  in  the  markets  of  the 
world. 

2.  Government  aid.~Theve  is  scarcely  any  form 
of  government  aid  to  railway  construction  which  has 
not  been  tried  in  Canada.  Bonds  have  been  guaran- 
teed by  municipalities,  by  provinces,  by  the  Dominion 
e  Imperial  governments.     Railroads  have  been 

27 


and 


.iHk-JtaaP 


AtJim.. 


•28 


INLAND  TRAFFIC" 


c'oiistnicted  directlv  hv  the  Provincial  and  Doniinion 
governments,  at  public  expense.  Extejisive  land 
grants  have  been  made  to  new  roads,  and  liberal  sub- 
sidies i!i  cash  have  becfi  granted.  Lj)ans  have  been 
made  to  the  railroads  to  facilitate  the  work  of  con- 
struction, or  to  help  them  out  of  difficulties  of  opera- 
tion. 

3.  Government  advanceH  to  rnihcaiiH. — The  Grand 
Trunk  !11  remains  a  debtor  to  Cajiada  for  the  en- 
tire amount  of  the  advances  made  to  it  before  Con- 
federation. 15 V  an  act  of  1884,  the  (iovernment's 
claim  was  placed  after  t'-"  common  stocl:  and  securi- 
ties of  the  company.  >!  >  interest  has  been  charged 
against  the  company  since  1807.  The  Great  West- 
ern's obligations  were  settled  in  18()8  by  approxi- 
mately 85  per  cent  of  the  total  ijidebtedness. 

In  1883,  the  Canadian  Pacific  found  itself  in  finan- 
cial difficulties.  Of  the  one  hundred  mdlions  of  cap- 
ital authorized,  fifty-five  millions  had  been  issued ; 
and  in  the  depressed  condition  of  the  money  market, 
stock  could  not  be  dis^iosed  of  at  any  remunerative 
price.  It  was  therefore  determined  to  deposit  a  sum 
with  the  Government  to  guarantee  the  payment  of 
dividends  for  ten  years  on  $05,000,000  of  stock  and  in 
this  way  enhance  the  value  of  the  stock.  Towards 
the  fund  the  Government  loaned  $7,390,912.  In 
1884,  a  further  temporary  loan  of  $22,500,000  was 
made  to  the  company,  while  in  the  following  year 
there  was  a  loan  of  $5,000,000.  Thv  most  recent 
phase  of  the  situation  is  the  aid  given  to  the  Grand 


..  ?•#' 


(JOVKHNMKVT  AM)  TUV   HAILWAVS  29 

Trunk   Pacific.     This   road  durin;.-   1J)1(5,    1917  and 
1918  received  $19,(i;j9,8;J7  in  advances  from  tlie  ^'(.v- 
ernnient.     At  the  close  of  the  fiscal  vear  1918-1919 
.$9-,0,00()  of  $7,.)00,000  authorized   remained   unex- 
pended.    The  Grand  Trunk  wished  to  use  this  m<.ney 
to  pay  interest  on  its  dehenture  stock  hut  the  govern*- 
ment  oh  jected  and  insisted  that  deficits  in  operation 
should  have  jiriority  over  other  charges.     The  gov- 
ernment made  the  remittance  conditional  on  that  un- 
derstanding.    This  made  it  impossihle  for  the  rail- 
road to  meet  its  interest  payments  and  the  road  passed 
into  the  hands  of  the  receiver  on  March  9th  1919. 

The  Canadian  Northern  was  given  a  demand  loan 
of  $15,000,000  bearing  interest  at  six  per  cent  and 
secured  by  a  mortgage  on  the  undertaking. 

4.  Sub-^^Jics.— The  details  of  the  subsidy  assistance 
to  the  Can^uian  Pacific  have  been  stated  already.     In 
1882,  a  new  phase  of  the  subsidy  policy  developed. 
In   entering   Confederation    each    province    surren- 
dered authorized  powers  in  regard  to  taxaticn  it  had 
hitherto  exercised.    The  provinces  were  unable  there- 
fore to  give  the  same  attention  to  the  development  of 
railways,  and  demanded  that  the  Dominion  govern- 
ment grant  subsidies  to  aid  in  railway  development. 
It  had  hitherto  been  understood  that  the  subsidy  pol- 
icy was  reserved  for  the  main  trunk  lines  uniting  dif- 
ferent provinces.     In  18C2,  without  it  being  stated 
that  the  work  to  be  aided  was-  for  the  general  interest 
of  Canada,  a  grant  of  $3,200  per  mile  was  made  to 
various  intra-provincial  lines. 

KV  0—4 


i 


li^m' 


no 


INLAND  TRAFFIC 


In  1807  a  iiKKliHcatioii  of  the  cash  suhsidy  policy 
was  made  whereby  the  iioiiiial  rate  of  ^;i,2iH)  per  mile 
was  to  l)e  Ki-aiited  when  the  road  cost  less  than  }i<l.>,()0() 
per  mile,  and  when  the  cost  was  in  excess  of  this  H^ure 
there  might  he  an  additional  suhsidy  etpial  to  50  per 
cent  of  the  excess,  hut  not  exceeding  a  total  sum  of 
Jj5(),400  per  mile. 

5.  JiailKatf  count nutiou  uudcr  nrrc  snhsidi/  policy 
of  JSSJ. — In  the  majority  of  the  railways  constructed 
under  the  new  suhsidy  pohcy,  practically  all  the  c;.sh 
that  went  into  the  enterprise  was  ohtained  fron.  the 
subsidies  and  the  bonds.  Often  the  ternis  oi"  a  con- 
tract have  been  that  the  coMtractor  shall  take  the  Do- 
minion, provincial  and  municipal  subsidies  and  some 
percentage  of  the  bonds.  Sometimes  a  portion  of  the 
stock  has  been  thrown  in  as  "sweetening."  Of  the 
exami)les  available,  two  will  serve.  In  188(>  a  con- 
tractor undertook  to  build  100  miles  of  the  Haie  des 
C'haleurs  for  $20,000  a  mile.  He  was  to  receive  sub- 
sidies amounting  to  $(),400  a  mile.  $13,1)00  a  mile  of 
first  mortgage  bonds,  and  one-half  the  capital  stock. 
Jn  1890,  an  investigating  committee  of  the  Legisla- 
ture of  Quebec  said  this  company  had  relied  entirely 
"on  the  njoney  to  be  obtained  from  the  government 
and  the  municii)al  corporations  to  carry  on  their  enter- 
prise." This  road,  which  had  been  charteied  by  the 
Province  of  Quebec  in  1872,  had  received  from  the 
Dominion  and  the  Province  of  Quebec  $1,474,800  m 
aid  of  100  miles  of  railway.  In  181»i),  the 
on  account  of  the  difficulties  in  which  it 


comp 
found 


[UIV 


itself. 


G()m:hn.mi.:nt  and  thi:  ham.wav 


31 


I 


proposed  to  transfer  the  railway  to  the  Donmuon 
Movernment.  The  (iovernnient  operated  it  »><„„  De- 
een.her,  IHIKI,  to  May,  18<)7.  DuriuK  this  ,,erio<l.  the 
running  expenses  exeeeded  the  reeeipts  hy  200  per 
eent.  Tlie  eonstruetion  eontraet  of  the  Hroekville 
>Vestport  and  Saidt  Ste.  Marie  ealled  for  the  siih- 
sidies  together  with  ^'jr>,00()  per  mile  in  stoek  and 
•r2.j,()(M)  in  honds. 

The  attitude  of  the  Don.irnon,  whieh  was  shared  hv 
the  Prov.nees,  was  that  the  ^rantin^r  of  a  suhsidv  to 
sueh  a  radway  as  has  l,een  spoken  of  was  not  to  he 
eonsidered  as  the  expression  of  an  otfieial  opinion  with 
relerenee  to  the  prohahle  sueeess  of  a  railway.     For 
the  bondholder,  the  rule  was  cmraf  emptor.     Hut 
^'overnnK-nts    eauF.ot    so    li<rhtly    eseape    the    eonse- 
quencx-s  of  their  aets.     The  eareless  ^rpantin^.  of  aid 
hurt  Canadian  eredit.     >Vhile  the  (iovernnier.t  (hd 
not  eoneern  itself  with  the  raisin^r  of  the  remaining 
por  ion  of  the  neeessary  eapital,  the  En^dish  bond- 
holder  re^rarded  the  (iovernnient  as  a  partner  in  the 
enterprise,  not  as  a  eareless  distributor  of  lariresse 
1  he  plaint,  in  1880,  of  a  bondholder  of  the  Caraquet 
Kailway  presents  the  bondholder's  point  of  view— 
';We  surely  had  a  riKht  to  assume  that  in  niakino-  a 
tree  gift  of  nearly  i:80,000  towards  the  eonstruetion 
oi  the  line,  the  Dominion  and  Xew  Hrunswiek  gov- 
ernments were  satisfied  with  its  importanee  and  would 
see  that  the  money  was  properly  and  judiciously  ex- 
pended. ..."  • 

6.  Land    grants,    subsidies    and    /or///*.— Earlier 


32 


INLAND  TRAFFIC 


J     ! 


r    i 
i 


liistory  shows  that  there  had  been  a  cooperation  of 
and  subsidies  and  cash  payments  outright.  The  Do- 
minion has  not  made  any  hmd  grants  jince  1894. 
While  Ontario  has  made  a  land  grant  in  aid  of  the 
Canadian  Northern,  as  well  as  of  the  Algoma  Cen- 
tral, the  land  grant  system  no  lojiger  possesses  public 
favor.  The  following  table  gives  a  summary  of  the 
land  grants  made : 

Acres 

^"""■"Jon    31,684,838 

^"^'^^'^    1,788,950 

Bntisli  Columbia   8,233,410 

New  Brunswick    1,788,392 

Nova  Scotia 160,000 

- 3,421,207 


Onti 


ario 


'^otaJ    46,886,797 

The  figure  shown  for  Quebec  is  a  net  figure.  The 
total  grant  was  in  excess  of  23,000,000  acres.  Part 
of  this  has  been  taken  back  by  the  government  at  a 
cash  payment  per  acre;  part  has  lapsed.  There  re- 
mains the  figure  given  in  the  table. 

'*'he  cash  subsidies  and  loans,  including  the  cost  of 
tlie  mileage  constructed  by  the  Donunion  and  handed 
^n-ei  to  the  Canadiaji  Pacific  syndicate,  which  have 
been  paid  are: 

Dominion    $221,911,278 

^^"^■^''•"     9,669,236 

^M'^>^'^    12,333,197 

Nova  Scofia 6,987,850 

New  Brunswick    4,907,487 

British  Cohunbia    1,284  572 


BTfr 


GOVERNMENT  AND  THE  RAILWAYS  33 

Manitoba    ^     2,878,887 

Municipalities    17,91 4,830 

Total    $277,887,343 

7.  Bond  guarantees.— The  Provincial  and  Domin- 
ion Governments,  in  the  majority  of  cases,  have  au- 
thorized the  railways  to  issue  bonds  for  a  set  amount 
per  mile  of  road  and  for  a  certain  mileage.  The 
bonds  were  printed  for  the  full  amount  authorized 
and  were  delivered  to  the  railways  as  the  roads  were 
built.  The  railways,  in  turn,  sold  the  bonds  to  the 
public,  the  government  guaranteeing  both  principal 
and  interest.    A  summary  for  1923  follows: 

Authorized  Delivered 

J^T'"'°"     $248,^27,438  $231,665,762 

**f "    °''*   25,50?,873  24;l89,89-2 

^"'^l".    41,724,410  3.M88,128 

hasltatchewan   42,900,000  17,904,062 

^"**"'''"     7,860,000  7,859,998 

British  Columhia   68.135,000  45,186,000 

New    Brunswick    8,028,977  8,028,977 

^»^^^c   98,000  98,000 

'^o*«'     it!44.>,+7(i,698  $:nO,620,8I9 

8.  Rate  regulation.— In  the  early  days,  the  Cana- 
dian provinces  were  concerned  with  the  problem  of 
how  to  obtain  rapid  developme;it,  and  while  railway 
legislation  contained  provisions  dealing  with  regula- 
tion, these  provisions  attracted  little  attention.  In 
1851,  the  Railway  Clauses  Consolidation  Act  provided 
that  tolls  were  to  be  fixed  by  the  directors  subject  to 
the  approval  of  the  Governor-iji-Council,  and  that 
there  were  to  be  no  preferences.     It  was  ten  years 


frrm 


34 


INLAND  TRAFFIC 


later  before  the  interest  in  rate  regulation  became 
more  concrete.  The  Grand  Trunk,  in  the  develop- 
ment of  its  system,  had  become  a  competitor  for 
United  States  business.  Flour  was  shipped  by  rail 
from  Chicago  to  Portland  and  thence  by  boat  to 
Boston.  The  rate  basis  was  low.  In  Upper  Canada 
there  were  complaints  that  local  rates  were  unduly 
high,  as  compared  with  these  thru  rates.  Rates  west- 
bound from  JMontreal  were  low  as  compared  with  rates 
eastbound  from  Toronto,  and  this  was  deemed  to  be 
to  the  advantage  of  Montreal. 

The  interest  in  rate  questions  continued  and  was  in- 
tensified between  1880  and  1890  by  the  railway  amal- 
gamations in  Ontario.  The  old  belief  of  efficiency 
in  competition  as  a  regulator  of  rates  was  shattered. 

9.  Legislation.— Bunng  this  period,  continued  ef- 
forts were  made  to  secure  legislation  regulating  rail- 
way rates.  It  was  not  until  1888  that  the  authority 
to  supervise  rates  was  given  to  the  railway  committee 
of  tlie  Privy  Council,  a  committee  composed  of  desig- 
nated members  of  the  cabinet  presided  over  by  the 
^Minister  of  Railways  and  Canals.  Provision  was 
made  for  uniform  classification.  Rebates  and  other 
forms  of  discrimination  were  prohibited.  Complaints 
arising  with  reference  to  rates  were  to  be  dealt  with 
by  the  railway  committee. 

10.  Report  and  investigation. —The  question  of  the 
appointment  of  a  special  regulative  tril)unal  came  up 
again  in  1896.  In  1899,  by  the  direction  of  the  JNIin- 
ister  of  Railways  and  Canals,  a  special  report  on  the 


Mmimm^^mim^m^^m^^fmi^mm:s''^^^m 


GOVERNMENT  AND  THE  RAILWAYS 


35 


operation  of  railway  coniiiiissioriers  in  England  and 
in  the  United  States  was  prepared  by  the  writer.  In 
1901,  the  writer  was  appointed  fecial  commissioner 
to  investigate  the  existing  eont  -•  i„  j-egai-j  to  rate 
grievances  in  Canada. 

11.  He  port  on  rate  grin  an  ccs:— The  report  of  the 
investigation  so  conducted  found  that  making  all  al- 
lowances  for  differences   in  conditions,   many  non- 
competitive rates  were  excessive  as  compared  with 
competitive  rates.     Great  dilatoriness  had  been  snown 
m  the  settlement  of  claims.     Under  the  Railway  Act, 
subject  to  the  outside  limit  fixed  by  the  maxima,  rates 
might  be  varied  at  will.     The  class  rates  of  the  rail- 
ways were  within  these  maxima.     The  railwavs  had 
exercised  the  right  to  vary  these  without  notice.'    Dis- 
turbance to  industry  had  thus  been  caused.     Sudden 
changes  in  rates  had  sometimes  inflicted  losses  on  in- 
dividuals.    In  cases  where  notice  had  been  given,  this 
had  been  done  as  a  matter  of  courtesy,  not  of  obliga- 
tion.    In  the  creation  of  commoditv  rates  there  had 
been  lack  of  principle.     The  rates  had  in  manv  cases 
been  granted  simply  on  the  continued  urgencv  of  the 
shippers  affected.     There  were  constant  complaints 
regarding  minimum  weights.     It  was  complained  that 
rates  on  American  shipments  into  Canada  had  been 
so  arranged  as  to  offset  the  geographical  advantages 
of  Canadian  producers.     Rates  on  short  distance  traf- 
fic had  been  so  high  that  commodities  had  to  be  moved 
by  wagon.     There  was  disproportion,  in  many  cases, 
between  the  carload  and  less-than-carload  rates. 


36 


INLAND  TRAFFIC 


It  was  recognized  that  the  organization  of  the  Rail- 
way Committee  put  difficulties  in  the  way  of  the  et'- 
fective  control  of  rate  matters.  The  Royal  Commis- 
sion of  1880  recommended  that  the  process  of  the 
committee  should  he  supplemented  hy  appointed  offi- 
cers who  should,  on  the  direction  of  the  conunittee, 
look  into  and  report  on  rate  grie\'ances  as  the\-  arose 
in  the  different  sections  of  the  country.  This  sug- 
gestion was  not  acted  upon.  In  consequence,  all 
questions  which  arose  had  to  be  dealt  with  before  the 
Railway  Conmiittee  in  Ottawa.  When  a  complaint 
arose  in  some  locality  at  a  distance  from  the  seat  of 
government,  ihe  distance  to  be  traveled  and  the  ex- 
pense involved  were  serious  obstacles  in  the  way  of  an 
effective  remedy. 

12.  Dual  functions  of  committee.— Anoiher  diffi- 
culty had  faced  the  committee.  It  had  dual  func- 
tions—administrative and  political.  Its  members 
were  primarily  concerned  with  political  functions. 
For  the  mojt  part,  they  came  to  the  deliberations  of 
the  committee  with  little  prior  technical  knowledge 
concerning  the  principles  of  railway  regulation.  The 
Minister  of  Railways  and  Canals  was  chairman  of 
the  committee.  In  matters  of  importance,  the  com- 
mittee did  not  feel  free  to  go  on  when  he  was  absent. 
In  fact,  he  was  the  committee.  ^Mlen  there  was  a 
^linister  of  Railways  who  took  a  keen  interest  in 
the  matters,  the  committee  was  active;  otherwise 
not.  The  duality  of  function  of  the  members  of  the 
committee— each  member  being  head  of  a  depart- 


•.-V 


l^I-MTSm^tfli^k^ 


GOVERNMENT  AND  THE  RAILVV-AYb        37 

merit— and  the  lack  of  continuity  of  tenure,  on  ac- 
count of  the  exigencies  of  politics,  prevented  the  de- 
velopment of  a  consecutive  pohcy. 

13.  Report  recommended  Railway  Commimon.— 
I'he  report,  after  reviewing  the  complaints,  conchided 
that  the  nature  of  the  Railway  Conmiittee  and  the 
fact  that  it  was  not  a  migratory  body,  prevented  its 
looking  after  rate  matters  in  the  fullest  way;  and  it 
recommended  the  appointment  of  a  speciafUailway 
Commission  as  essential  to  a  more  efficient  regula- 
tion. 

14.  Board  of  Railway  Commissioners  created.— 
The  Board  of  Railway  Commissioners  for  Canada 
was  constituted  under  the  Railway  Act  as  amended 
m  1903,  which  became  operative  February  1,  1904. 
As  organized,  the  Board  had  a  membership  of  three 
—a  Chief  Commissioner,  a  Deputy  Chief  Commis- 
sioner and  a  Commissioner.     In  1908,  there  was  a  re- 
organization providing  for  six  members— Chief  Com- 
missioner,  Assistant    Chief   Conmiissioner,   Deputy 
Chief  Commissioner  and  three  (Commissioners.     The 
(lualifications  of  the  Chief  Commissioner  are  that  he 
IS  or  has  been  a  Judge  of  a  Superior  Court  of  Canada 
or  of  any  Province  of  Canada,  or  that  he  is  a  bar- 
rister or  advocate  of  at  least  ten  years  standing  at 
the  Bar  of  any  such  Province.     The  qualifications 
ot  the  Assistant  Commissioner  are  the  same  as  those 
of  the  Commissioner.     The  qualifications  for  Deputy 
Chief  Commissioner  are  not  specified.     The  Commis- 
sioners are  appointed  for  a  term  of  ten  years  and  may 


li^^'\i;£'l 


88 


INLAND  TRAFFIC 


be  reappointed.     The  age  limit  is  seventy-five  years. 

I.>.  Pozcrr  of  Board  over  location,  count  ruction  and 
operation.— The  Board  possesses  extensive  powers  in 
regard  to  location,  eoustruction  and  operation  of  rail- 
ways. It  approves  location  plans  before  construction 
begins,  grants  leave  to  cross  bigliways  or  railways, 
and  fixes  the  protection,  if  any,  at  such  crossings! 
In  the  ease  of  railways  constructed  l)efore  11)01),  the 
eost  of  protection  at  crossings,  following  the  usual 
practice,  was  divided  betweei;  the  nuniicipality  an<I 
the  railway.  The  proportions  in  which  the  division 
was  made  varied  with  conditions,  lender  the  legisla- 
tion of  1001)  any  railways  thereafter  constructed  are 
to  pay  the  full  expense  of  any  protection  that  may 
be  ordered  by  the  lioard. 

10.  Jurisdiction  over  rates.— The  Board  has  an  ex- 
tensive jurisdiction  in  regard  to  rates.  Passenger 
tariffs  are  divided  into  two  elasses— standard  and 
special.  Freight  tariffs  are  divided  into  three 
classes— standard,  special  and  competitive.  All 
tariffs  are  required  to  be  filed  with  the  Board  and 
provision  for  publication  is  also  made.  When  a  spe- 
cial tariff"  is  reduced,  three  days'  notice  nmst  he 
given.  When  it  is  increased,  there  nuist  be  thirty 
days'  advance  notice.  Standard  freight  and  pas- 
senger tariffs  are  subject  to  the  approval  of  the 
Board.  Special  and  competitive  tariffs  do  not  re- 
(piire  the  express  sanction  of  the  Board.  The  rates 
contained  in  such  tariff's  are  lower  than  the  standard 
tariff  rates.     The  competitive  tariffs  deal  with  the 


GOVERNMENT  AND  THE  RAILWAYS        39 

tolls  to  or  from  specified  i)oints  which  the  IV.md  may 
consider,  or  may  have  dechired  to  he  competitive 
points  not  suhject  to  tlie  lon^r-and-short-haul  chiuse 
under  the  provisions  of  the  act.  The  Board  Fnay  (hs- 
alJow  any  tariff  which  it  considers  mijust  or  unreason- 
ahle,  and  may  require  a  company  to  suhstitnte  a  tariff 
satisfactory  to  the  Hoard,  or  it  may  prescrihe  other 
rates  than  those  disallowed. 

Discriminations  hetween  persons  and  hetween  local- 
ities are  forhidden. 

In  the  revision  of  the  Railway  Act  of  1888  the  pro- 
vision hy  which  Parliament  mi^dit  revise  rates,  hut  not 
so  as  to  reduce  the  return  l)elow  15  per  cent  on  the 
c<)st,  was  onntted.     The  return  in  the  case  of  the 
Canadian  Pacific  had  heen  placed  at  10  per  cent   in- 
stead of  15  per  cent,  which  left  it  open  for  the  railway 
to  plead  a  special  contract.     In  1904,  the  railway 
clain.ed  that  until  the  return  limited  on  the  cost  was 
reached,  the  Hoard  was  without  juris  hction  over  its 
rates.     The  question  came  hefore  the  courts  in  1909, 
hut   hefore  adjudication,   the   Canadian   Pacific  ac- 
quiesced in  the  Board's  control  over  rates  and  the 
question  has  not  heen  raised  since. 

The  classification  of  frei^rht  is  also  suhject  to  the 
approval  of  the  Board. 

17.  Traffic  facilities  and  methods.— 'There  are  wide 
provisions  regarding  the  providing  of  reasonahle  and 
proper  facilities  for  traffic,  and  requiring  the  inter- 
change of  traffic  lietween  railways.  Companies  whose 
railways  connect  may  he  required  to  agree  upon  joint 


40 


INLAND  TRAFFIC 


tariffs  for  a  continuous  route  over  both  lines;  and,  if 
they  cannot  agree  upon  the  amounts  of  their  rates  and 
the  division  thereof,  the  Board  is  empowered  to  deter- 
mine such  matters. 

The  Board  is  empowered  to  prescril)e  forms  of  hills 
of  lading  and  the  conditions  under  which  goods  shall 
be  carried,  and  has  formally  approved  a  uniform  hill 
of  lading  for  use  by  railway  companies  and  shippers 
thruout  the  Dominion. 

18.  Ejcpress,  telegraph  and  telephone.— The  Act 
was  originally  concerned  with  railways.  Regulative 
powers  in  respect  to  express,  telegraph  and  telephone 
companies  have  been  added.  The  jurisdiction  in  the 
cases  so  added  is  essentially  a  rate  jurisdiction  and  is 
not  as  wide  as  that  granted  in  the  case  of  railways. 

19.  Amended  Act  provides  for  grain  movement. 
—A  far-reaching  amendment  brought  about  by  the 
Board  was  made  in  lAIarch,  1916.  This  invested  the 
Board  with  authority  when  a  railway  company  failed 
to  provide  sufficient  facilities  to  move  grain  from  the 
western  provinces  to  the  elevators  at  the  head  of  Lake 
Superior  or  beyond,  after  the  close  of  Lake  navi- 
gation, to  require  any  other  railway  company  to  move 
the  grain.  The  rates  published  by  the  company  in 
default  should  apply  over  joint  routes  so  directed  by 
the  Board  and  be  apportioned  among  companies  as 
the  Board  might  direct. 

The  circumstances  leading  to  the  amendment  of 
the  Act  were  that  the  transportation  of  a  banner  crop 
of  grain  in  IDlo  (723,000,000  bushels  as  against  32'>  - 


l(i^„ 


■^iSr? 


...  'S  ji    -.  i 


'^^^SC^ 


'■^.  x< 


1 


1 

■■•J 


GOVERNMENT  AXD  THE  RAILWAYS 


41 


m 


000,000  bushek  in   loi  i         i 
1913)  ..lm?T  '"'"^  .503.000,000  hushe 

1913)  almost  swamped  the  railways.     KJevators  and 
temporary  granaries  were  not  sufficient    n  I  /. 

A'rain,  and  nmeh  of  it  I,.,  i  f     ,  "  '''»"'^«'*  the 

iiiutii  or   It  iijui  to  be  inovec    before  fli*. 

spring  rams  „f  ,ui«  .et  i„.     The  „«,al  rule         ,,    ! 

«..np«n.v  .s  entitled  to  the  tn.ftic  ....  its  „wn  h,  e  1 , 

..    .a.lway  eo„.p„,.v  e.,..ld  he  expecte.l  to",.      .  Z 

Mtion.     O,   tie  other  han.l,  a..y  e„,.,iiti„n  of  trans- 
portat.„n  which  kept  the  western  farn.er  from  Zr 
kefng  h,s  crop  until  the  following  J..ne  „r  Ju  vTaJ 
regarded  as  unreasonahle.     The  Act  was  tl"if 
an.ended  to  ...eet  the  situation  "^^""^ 

aofh'^''''-'''''"''-"'^"''"  ^'^''*'  t-on..niss.oner  presides 
and  h.s  „p,„,„„  on  any  ..uestion  which.  i„  the  opWon 

1  '    the"  A    "t"  ri^f  •'"'  '""■•  '»  «""'•     ^"  hi  ab" 
»ence,  the  Assistant  Chief  Conin.issioner  takes  hi. 

place;  and  in  the  ahsence  of  both,  the  Deputy  Cht 
Co™„.ss,oner  presides.     \Vhen  so  p,.esi,C  either 
...isine,""  '"  "'  """  '"^^'-^  -  «"-  '^h'^f  Cot- 

at,on  of  1908  provided,  as  a  n.atter  of  conven  e  ,Z 

fm  the  organ^ation  of  the  Board  i..to  two  sections 

1  h,s  ,s  not  a  hard-and-fast  division,  but  sin.piv     d  -' 

Ms.o„  of  convenience;  that  is  to  sav.  anv  tlu^e'  Co,„. 

7rr%  or  even  two.  n.ay  hold  a  s'.tting  of    he 

;^  not  usual  for  m.-,  than  three  Commissioners  to   it 
The  dec.s,on  of  the  three  so  constituting  a  section!' 


4ft 


J 


INLAND  TRAFFIC 


accepted  as  a  decision  of  the  whole  Board.  Fur- 
ther, two  Coiiiinissioners  constitute  a  quorum;  conse- 
(|uently,  if  two  Commissioners  are  agreed  at  the  sit- 
i'm<r  of  the  Board  as  above  exphiined,  their  decision 
is  the  decision  of  the  Board.  This  gives  the  Board 
a  much  more  elastic  organization.  For  example,  it 
is  customary  to  have  sittings  of  the  Board  in  Eastern 
Canada,  while,  at  the  same  time,  sittings  are  being- 
held  in  Western  Canada.  On  more  than  one  occa- 
sion, on  account  of  pressure  of  business,  both  sections 
of  the  Board  have  held  sittings  on  the  same  day  in 
Ottawa. 

22.  Procedure  of  Board  informal.— The  Board  is  a 
court  of  record  and  has  an  official  seal.  In  the  de- 
velo})ment  of  its  procedure,  however,  it  has  followed 
somewhat  informal  lines.  Since  organization,  it  ha* 
allowed  costs  in  only  two  cases.  While  lawyers  aj  - 
pear  before  it,  the  parties  interested  may  decide 
whether  or  not  they  shall  be  represented  by  them. 
In  rate  cases,  it  is  customary  to  have  the  matters  in 
dispute  presented  by  traffic  re^M'esentatives  of  the 
parties  concerned.  Rules  of  evidence  are  not  fol- 
lowed so  strictly  as  in  o    linary  courts. 

23.  Findings  of  Board  on  law  and  fact.— A  finding 
by  the  Board  on  a  question  of  fact  is  linal.  In  de- 
termining any  question  of  fact  the  Board  is  not  bound 
i)y  the  previous  finding  or  judgment  of  any  other 
court.  Such  finding  or  judgment  is  tc.ken  by  it  as 
prima  facie  evidence  only.  This  finality  as  to  fact 
covers  the  Board's  powers  with  reference  to  reason- 


msM^A^^ 


^i 


GOVEKXMENT  AND  THE  RAILWAYS         43 

ableness  of  rates  and  discrimination.  If  there  is  a 
question  of  law  involved  in  an  order  issned  by  the 
Hoard,  the  Board  may  pernnt  the  apphcants  to  an- 
peal  to  the  Supreme  Court.  If  it  is  l,elieved  that 
the  Board  has  exceeded  its  jurisdiction,  the  parties 
affected  may  appear  l,efore  a  jud^c  of  the  Supreme 
Court,  and  if  they  make  out  a  prima  fade  case  thev 
will  be  permitted  l,y  him  to  bring  their  case  l,efore 
the  Supreme  Court. 

There  may  be  an  appeal  both  on  facts  and  041  law 
to  the  Governor-in-Council.  He  may  also,  of  his  own 
motion,  intervene  and  override  the  decision  of  the 
Board,  or  may  refer  the  matter  back  for  additional 
evidence  which  the  parties  may  desire  to  submit. 

In  the  period  from  February,  VMU,  to  December 
1023,  the  Board  had  formal  hearings  in  7,9(J9  cases' 
and  there  were  only  8.3  appeals  as  follows: 

To  Suprf-nie  To  Siij»renie  Tn  Gov- 

Court  on  Court  oil  c-rnor-in- 

Law  Jnrisc'ictioii  Council 

^ismis^d    ......             15  15  19 

AlIowtMi  in  wliolf  or 

^.'"  P'n-t    1  8  2 

Witlulrawn o  1  , 

HefVrrcd  buck    ...  .  o 

I)  !•  •    •  t» 

I  crKJinfT    

Abaiuioned    1  4 

In  sum,  there  hnve  been  appeals  in  1  per  cent 
of  the  ca.ses  formally  heard.  lu  less  than  one-seventh 
of  the  appealed  cases  has  the  Board  been  over-ruled. 

24.   iritat  the  Board  has  aeeomplished.—'Vhi,  scope 


i  : 


44 


INLAND    II     FFIC 


of  the  applications  to  the    u.h,*'  is  wide.    To  refer  to 
the  matter  in  a  suminai         .y.  the  Board  has  aiithor- 


•f  rates  in  Canada  he- 

'  in  favor  of  Aineri- 

r*'''  -       d  telephone 

.  anada,  and  has 

passenger  rates. 

*nany  individual 


ized  demurrage  rules,  ret.  '  •     n 

cause  of  discrimination  p   ic 

can  thru  traffic,  regulati  r     u 

rates,  reduction  of  rates  !:■  '^' 

authorized  increases  of  fr\  i^ht 

It  has.  ill  addition,  dealt  w'h  «  ; 

cases  or  rates,  under  the  iicadinprs  >.f  reasonableness 

and  discrimination  as  well  as  cases  aficctin^  facilities, 

long  distance  telephone  connection,  traiji  operating 
rules,    flapr    station    facilities,    wire    crossing    rules, 

standard  regulations  as  to  locomotive  boilers  and  their 
inspection,  regulations  as  to  air-brakes,  hand-holds, 
dumj)  ash-pans,  etc. 

25.  Applications  ami  complaints.—Vrom  the  or- 
ganization of  the  Board  dowji  to  the  end  of  1923, 
some  81,251  applications  came  before  it.  Matters- 
submitted  may  be  dealt  with  either  formally  in  hear- 
ings or  informally  by  investigation,  report  or  corre- 
spondence. The  informal  procedure  predominates. 
In  1923,  ninety-four  per  cent  of  the  applications 
made  were  so  dealt  with. 

In  various  instances,  complaints  in  which  it  has  no 
iurisdiction,  e.  g.,  claims  for  loss  and  damage,  come 
before  the  Board.  Here,  without  alleging  jurisdic- 
tion, the  matter  is  usually  brought  to  the  attention 
of  the  railway  concerned,  in  the  hope  that  thru  the 
Board's  good  offices  a  settlement  may  be  expedited. 
Many  requests  for  information,  e.  g..  as  to  particular 


GmmSVliST  AM)  THE  RAILWAYS  45 

rates,  conu  in.     The  applieatic.ns  cr.ver  a  wide  variety 
of  matters  ecmiin^  uiuJer  the  Hailwav  Aet  and  vary 
n.ni  the  eon.phiints  of  indivi.h.al.s  to  n.atters  of  nuh- 
Jic  interest  affecting  the  whole  eornniunity. 

REVIEW 

What  interpretati.M.  has  been  taken  of  the  British  North 
Ammcan  Act  by  b<-al  railroads  and  with  what  re,ult» 

How  was  ratf  regulation  regarded  in  the  early  days  of  Ca- 
nad.an  railroad  buildmg:  What  change  wa.  brought  about  by 
the  Radway  Clauses  Consolidation  Act?  ^ 

mis?ione;r  !I!m  ^"7"  '"'''  ''"*•""  °'  '^'  ^"'»'''*  «f  R«"^«v  Com. 
missioners  with  reference  to  rales  and  traffic  facilities       ^ 

In  your  opmion  what  has  the  Board  accomplished? 


XV  c 


!  i 


I! 


■ 


CHAPTER  III 

DEVELOPMENT  OF  RAILWAY  FACILITIES  AND 

EQUIPMENT 

1.  Expansion  of  Canadia  railway  system. — The 
railway  mileage  constructed  in  Canada  showed  a  con- 
sistent rate  of  increase  up  to  the  year  1917,  when  it 
aggregated  38,604  miles.  A  large  proportion  of  this 
mileage  has  been  built  west  of  the  Great  Lakes,  in 
one  year,  1912,  71  per  cent  of  the  mileage  being  con- 
structed in  Western  territory.  As  in  the  United 
States  the  railway  mileage  constructed  in  Canada 
within  recent  years  has  been  small.  From  1919  to 
1923,  the  net  increase  in  mileage,  including  all  track- 
age, Vvds  only  1,750  miles. 

2.  Distribution  of  railway  mileage. — Analysis  of 
the  f?^res  of  railway  mileage  as  contained  in  the  gov- 
ernment returns  for  the  year  ended  Dec.  31,  1923 
shows  the  following  distribution: 


Provinces 

Prince  Edward  Island 

New  Brunswick 

Nova  Scotia 

Quebec     

Ontario    

Manitoba     

Saskatchewan    

Alberta    

British  Columbia    .  .  . 
Yukon    


Percentage  of  Percentage  of 
Population         Mileage 


11.38 

26.86 
33.38 


28.26 


9.32 

12.49 
27.59 


49.55 


46 


wmm' 


RAILWAY  DEVELOPMENT  47 

It  might  seem  that  in  proportion  to  population,  the 
section  west  of  the  Great  Lakes  is  well  supplied  with 
railways;  but  this  would  be  a  hasty  conclusion.  Of 
the  total  area  embraced  in  the  diifferent  provinces 
the  provinces  west  of  the  Great  Lakes  constitute  57 
per  cent. 

The  following  table  summarizes  the  relation  be- 
tween population  and  mileage  in  the  different  Prov- 
inces in  1923  '  based  on  the  latest  censu?: 

Miles  of  rail-  Population 

p                                               Railway     way  per  1,000  j>ermileof 

f  roMnce                                  mileage           .„.  miles  railway 

Prmce  tdwar,    Island    ,.77                 Uti.H  ;i,9o' 

New  BrunswKk    ,,917                  69.8  .obis 

Nova   Seotia    ,,447                  ^jj, ,.  .^^ 

it';:;:, ^-^^^        7.1       i^:? 

hakatehewa,,     «,.5,7  ^^^  :^J-: 

,J".'"*J^,-. 4,784  18.9  iko 

British  Columbia   4^19.5  ,3  ^  ,  ,„  „ 

^"l'""    58  0.3  7i:"7 

3.  Potential  railzvm/  traffic— An  interesting  in- 
dex of  the  traffic  possibilities  of  an  agricultural  coun- 
try like  Canada  is  to  be  found  in  the  sum  total  of 
agricultural  production.  For  while  this,  on  account 
of  local  consumption,  will  be  much  in  excess  of  what 
moves  by  rail,  it  shows  the  maximum  possible  move- 
ment. 

Details  as  to  agricultural  production  and  as  to  live 
stock  are  given  in  the  following  summary : 

'  1  he  total  is  exclusive  of  273  miles  located  in  the  I'nited  States. 


48  INLAND  TRAFFIC 

LIVE  STOCK,  EXCLUDING  POULTRY,  1924 

Provinces  Hear!  Ptrcentage 

Priiu-e  Edward  Island 284,0,'J5  1.4 

Nova  Scotia   658,102  3.1 

New   Brunswick    488,565  2.3 

Quebec 3,755,146  18.1 

Ontario    6,259,359  30.1 

Manitoba     1,600,535  7.7 

Saskatchewan    3,695,757  17.8 

Alberta    .  ; 3,639,862 

Britisli  Columbia  * 414,342  2.0 

20,816,303  100.0 

*1923. 

Between  1923  and  1924,  there  was  an  increase  of 
about  900,000  head.  There  were  increases  in  horses, 
mules,  cattle  and  swine  and  a  decrease  in  sheep. 

FIELD  CROPS,  1923 

Provinces  Tons  Percentage 

Prince  Edward  Island 969,012  2.1 

Nova  Scotia 1,199,540  2.6 

New   Brunswick    1,224,410  2.6 

Quebec     9,336,526  20.5 

Ontario    16,178,588  35.7 

Manitoba     4,330,146  9.5 

SaskatcJKwan    7,104,468  15.6 

Alberta    4,264,378  10.1 

British  Columbia    610,400  1.3 

45,217,468  100.0 

The  totals  were  about  2  per  cent  below  1921.  There 
were  decreases  in  all  the  Provinces  excepting  Prince 
Edward  Island,  Quebec,  Ontario,  and  Manitoba.    In 


i^'mm^:^mm 


UAILWAY  I)K\ELOPME\T  49 

1921,  the  eastern  Provinces  produced  2.5.8  millions 
of  tons  and  the  western  20.;j  nnllions  (,f  tons  of  farm 
products;  in  1923,  the  figures  were  28.9  and  10  ;j  mil- 
lions  of  tons  respectively. 

These  figures  do  not  include  fruits,  home-made 
cheese  and  butter,  which  fig,„.es  are  not  available  for 
the  mter-censal  years.  The  omitted  quantities  would 
make  about  one  per  cent  difference. 

4.  Actual  traffic.~Oi  course,  the  potential  traffic 
differs  m  such  items  as  have  been  quoted  from  the 
actual  traffic.  The  traffic  returns  for  1923  show  that 
the  tonnage  of  agricultural  products  transported  was 
.>0  per  cent  of  that  given  in  the  preceding  state- 
ment. 

5.  Freight  traffic— Between  1919  and  1923  inclu- 
sive, the  total  freight  traffic  of  Canadian  railways 
increased  by  nearly  6  per  cent  from  111.5  to  1183 
millions  of  tons.  In  the  same  period,  agricultural 
products  carried  increased  21  per  cent  and  products 
of  mines  12  per  cent.  The  following  table  shows  the 
percentage  importance,  for  a  period  of  years,  of  the 
leading  articles  carried: 

if)if) 

l^roducts  of  Apriculture   19.14, 

I'roclucts  of  Animals    4  r  j 

I'rodncts  of  Mines    3,1  7] 

Products  of  Forests is.  Mi 

Manufactures  and  Misc 54.05 


lf)50 

;?.9H 

:v>.37 

17.*8 
-'.5.84 


19I?I 
2'J.97 

•.i<n 

3;j.T8 
l(i.:{9 
22.19 


W22 
2fi.:il 

•.i.22 
29.%:, 
\(}.i2 
-n.,57 


w-2:i 

-'1.78 

:j.oo 

fU.49 
16.4.5 
2i.27 


Products  of  the  mines,  agriculture,  and  the  forests 
are  the  most  important  in  point  of  tonnage.  In  the 
mcrease  of  tonnage  of  1923  over  1919,  the  first  two 


^i^<fJM^J:,1' 


I- 


I'l 


«0  IXLAND  TRAFFIC 

are  more  than  responsible   for  the  entire  amount. 

6.  Comvwdities  carried  bi/  railwai/  systemn. — The 
distribution  of  carriage  of  commodities  among  the 
leading  railway  systems  is  given  in  the  following  table : 

DISTRIBUTION    OF    CARRIAGE    OF    COMMODITIES    AMONG 
LEADING  RAILWAY  SYSTEMS 

CN.R.  C.P.  R.  Can.  So.  All  Roads 

Percent.  Percent.  Percent.  Percent. 

Products  of  Agriculture    23.J)  3.3.6  iri-S  21.8 

Products  of  Animals    ;i.3  2.4.  7,3  30 

Products  of  Mines   .32.5  J3.2  32.2  'i\.^ 

Products  of  Forests    17.1  15.4.  5.2  16.5 

Manufactures  and  Merchandise      23.2  25.4  40.0  24.2 

7.  Passengers  earned.— The  passengers  carried  in 
1923  were  44.8  millions  as  compared  with  46.8  mil- 
lions in  1921,  a  decrease  of  4.3  per  cent. 

8.  Tonnage  sources. — The  source  of  the  tonnage 
is  of  interest  as  bearing  on  the  revenues  of  the  rail- 
ways, for  where  traffic  is  received  from  connecting 
carriers  the  line  receives  a  division  of  the  rate  instead 
of  the  total  rate.  Of  the  total  tonnage,  57.39  per 
cent  originated  oji  the  line  carrying  the  traffic;  13..5.5 
per  cent  was  received  from  Canadian  connections; 
while  29.0()  per  cent  was  received  from  United  States 
connections.  The  percentages  differ  as  between  the 
roads  themselves.  For  example,  in  the  case  of 
the  Temiscouata  and  the  Algoma  Central,  two  of 
the  smaller  roads,  the  percentages  of  tonnage  orig- 
inating on  the  lines  were  respectively  95.8  and 
82.8. 

The  Canada   Southern  and  the  Pere  Mar'^MCcte 


RAILWAY  DEV?:L0PMFA'T  61 

handle  large  amounts  of  tonnage  from  United  States 
connections,  with  resultant  low  ton-mile  earnings  on 
a  large  volume  of  low  grade  tonnage.  The  other 
lines  find  the  traffic  from  Ignited  States  co^inections 
relatively  less  important. 

The  following  tahle  presents  a  summary  statement 
of  the  source  of  tonnage  in  1923  for  the  more  impor- 
tant lines.    The  figures  are  expressed  in  ^percentages. 


C.  \.  R. 
C.P.  H.    . 

Can.  So. 
All  Hoads 


Tonnape  originat- 
injf  oil  line  car- 
rying the  traffic 

fii.« 

71.83 

lS.(i4. 

57.39 


Tonnape  from  con- 
necting Canadian 
carriers 

8.53 
1:2.83 

9.80 
13.55 


Tonnape  from 
United  States 
connectlon.s 

27.04 
15.34 
71.56 
99.06 


The  Canada  Southern,  the  Pere  Marquette  and 
the  Wabash  are,  as  might  he  expected  from  their 
location,  the  lines  most  interested  in  receiving  traffic 
from  the  United  States  roads,  the  amount  so  received 
by  them  being  33  per  cent  of  the  total  amount  of  ton- 
nage received  by  all  Canadian  roads  from  United 
States  roads  in  1923. 

9.  Railway  mileage  of  Caiuida.—ln  the  vear  1923, 
Canada,  with  9,000,000  of  a  population,  had  40,094 
miles  of  single  track  railway.  Ainong  the  countries 
of  the  world  this  is  exceeded  only  by  the  railway 
mileages  of  the  United  States  and^Russia.  The  av- 
erage stock  outstanding  per  mile  is  $21,282.  In 
1923  of  the  853  millions  outstanding  5Q  per  cent  paid 


S^ii__. 


52 


INLAND  TRAFFIC 


no  dividends.  The  average  return  on  dividend  pay- 
ing stocks  was  8.05  per  cent  or  an  average  of  3..5()  per 
cent  on  all  stocks.  Down  to  Confederation,  there 
were  2,278  miles  of  railway  constructed.  In  the 
single  year  ended  December,  1912,  an  equivalent 
mileage  was  added.  In  the  year  1914-1.5  alone, 
5,000  miles  were  added.  The  problem  that  now  faces 
Canada  is  one  of  development  up  to  the  recent  and 
rapid  expansion  of  railway  network. 

10.  Improvements  in  roadbed  and  rolling  stock.— 
The  effect  of  improved  track  and  rolling  stock  is  con- 
cerned with  the  net  profit  of  operation  rather  than 
with  the  rate  actually  charged.  But  it  has  an  indi- 
rect effect  upon  the  rate  in  that  it  adds  to  what  the 
railway  can  do  in  its  operation  and,  therefore,  gives 
it  an  advantage  in  point  of  such  rate  reductions  as  are 
brought  about  by  the  factors  lately  outlined.  Fur- 
ther, it  enables  a  large  volume  of  business  to  be 
handled  more  economically. 

The  56-pound  rails  of  the  early  seventies  have  been 
replaced    with    80,    90   and    even    100-pound    rails, 
thereby  enabling  heavier  rolling  stock  to  be  carried.' 
Ix\  the  endeavor  to  carry  heavy  trainloads,  thereby 
lessening  unnecessary  engine  mileage,  railways  are 
now  building  on  easy  grades  and  curves.     Heavy 
grades  and   sharp   curves   lessen   tractive  efficiency. 
The  Canadian  Pacific,  which  had  a  4.4  grade  on  the 
Field   Hill,   has  by  tunnel  construction  cut  this  in 
two,  thereby  doiililijig  engine  efficiency.     The  Grand 
Trunk   Pacific  line  was  built  on  a  .4  grade.     The 


msmm^mMja 


'^Kt  -r  ;w-/;^p<.«^p«ALiMJi 


4 


RAILWAY  DKVKLOF\MFAT  53 

extensive  inipiovements  by  the  Canadian  Pacific  in 
the  Rocky  Mountain  ten  itory  result  in  increased  effi- 
eiency  and  tend  to  offset  the  hauhige  advantages  of 
the  easy  grades  of  the  new  lines. 

Engines  have  increased  in  weight  and  tractive 
efficiency.  A  Grand  Trunk  engine  built  in  1872 
weighed,  with  its  tender,  (52  tons.  The  present  Mi- 
kado type  weighs  220  tons. 

11.  Increased  she  of  freight  c«r*.— The  size  of 
freight  cars  was  increased  during  the  early  seventies 
after  the  abandonment,  both  in  the  United  States  and 
Canada,  of  the  narrow-gauged  lines.  In  the  endeavor 
to  introduce  economies,  increase  in  carrying  capacity 
was  looked  to.  In  187G,  the  standard  capacity  of  the 
ordinary  box  car  was  fifteen  tons.  Today  thefifteen- 
ton  car  has  practically  disappeared. 

The  following  table  summarizes  the  distribution  of 
the  freight  car  equipment : 

FRF.K.irr  CARS 

\nrnber  Total  Average 

"*'  Capacity  Capacity 

^^^  ^''"-^  (Tons)  (Toms) 

;?1^     -IVf).?  r,.587,fif)8  3t.5.>.> 

;„;"    -'-'MW)  r.SH8,83i  :«.Mi 

;;?;     -'•»'<•>';:»  H,-'5<),G7.'!  ;«.6«f) 

*^^     -'-'fl.'iU  8,349,.'7I  :«;.3fi.' 

12.  Car  loaiUng. —The  forty-ton  car  mav  be  re- 
garded as  the  standard  general-purpose  car  today. 
The  larger  cars  are  used  for  heavy  bulk  commodities, 
rnder  the  railway  rules,  a  car  may  be  loaded  10  per 


^anjim^j 


J54 


INLAND  TRAFFIC 


I 


N 


cent  above  its  marked  capacity.  But  the  extent  to 
which  raih'oad  freight  cars  can  be  loaded  nearly  to 
their  carrying  capacity  depends  on  connnercial  con- 
ditions, and  on  whether  tonnage  can  be  held  until  a 
maximum  load  is  obtained  in  the  car. 

From  the  standpoint  of  the  railway  there  is  not 
only  the  advantage  of  the  larger  amount  which  can  be 
handled  in  the  larger  car,  thus  economizing  in  engine 
and  train  mileage;  there  is  also  an  increase  in  the  pay 
weight  per  car. 

An  interesting  example  of  the  economies  in  this  re- 
spect was  afforded  by  the  comparative  experience  of 
the  Canadian  Pacific  for  the  month  of  January  in 
1917  and  in  1918,  in  the  movement  to  St.  John,  New 
Brunswick.  The  fact  that  95  per  cent  of  the  cars  con- 
cerned contained  export  freight  facilitated  heavy  load- 
ing in  view  of  the  ocean  tonnage  conditions  existing. 
In  1918,  the  average  load  per  car  was  32.3  tons  as 
compared  with  26.4  tons  in  1917.  This  on  the  same 
movement  meant  a  saving  in  use  of  1,313  cars,  a 
lessened  coal  consumption  of  7,336  tons,  and  in  addi- 
tion there  were  savings  in  labor  and  repair  costs. 

On  overseas  export  freight  during  1918.  the  gen- 
eral rule  of  the  Canadian  Pacific  was  that  cars  were 
to  be  loaded  to  full  carrying  capacity.  Negotiations 
took  place  between  the  railways  and  the  shippers  with 
reference  to  increased  loading.  It  wa^  represented 
that  it  was  necessary  to  do  everything  possible  to  ob- 
tain heavy  car  loading  to  conserve  car  supply,  with 
a  view  to  meeting  the  expected  heavy  demand  during 


9flc?as4:;?v^ii'''f^ji 


k^FJUF-1% 


RAILWAY  DEVELOPMENT 


r)3 


'4 
I 


the  fall  and  winter.  By  August.  1918,  as  a  result  of 
these  negotiations,  there  was  a  substantial  agreement 
as  to  the  necessity  of  the  increased  loadings.  As  a  re- 
sult, increased  weights  became  effective  on  some  one 
hundred  articles  moving  on  commodity  taWtt's.  The 
increases  varied  in  amount  but  are  roughly  equivalent 
to  12  per  cent.  The  representatives  of  the  shippers 
emphasized  that  their  agreement  was  for  the  duration 
of  the  war  only. 

An  incident  of  importance  in  connection  with  the 
use  of  a  larger  car  and  attendant  concentrated  load- 
ing IS  that  the  tare  or  weight  of  the  car  itself  does  not 
increase  in  the  same  ratio  as  carrying  capacity.  The 
report  of  a  speci.d  Committee  of  the  British  Ministry 
ot  Reconstruction  has  recently  dealt  with  the  question 
ot  standardization  and  uses  the  following  language: 

We  wm.Ul  cnll  at^ontion  to  the  amount  of  dead  weight  ear- 
ned on  i  r.Ush  railways.  The  tare  of  an  ei^H.t-ton  wagon, 
bu.It  to  the  I  learni«  House  Regulations  is  70  per  cent  of"  thj 

eountTies^'""'^  ^"''  *"  *"  "*'"  ''""  '""*  "^  ^''"  "■''^«""'*  "^  "*''^''- 

Taking  larger  cars,  out  of  the  total  loaded  wei"lit 
the  tare  of  the  20-ton  car  is  41  per  cent;  of  the  ;j()-ton 
car,  3.5  per  cent;  of  the  40-t()n  car,  32  per  cent;  of  the 
.50-ton  car,  .30  per  cent. 

13.  Advantages  of  electric  traction  over  steam  — 
Electric  traction  has  so  far  been  chiefly  concerned 
with  passenger  hauls,  either  on  street  car  or  inter- 
urban  lines. 

Steam  power  is  uneconomical  in  that  only  a  rela- 


56 


INLAND  TKAFFIC 


lively  small  number  of  heat  units  is  utilized.  In 
favor  of  eleetrie  traetion,  it  is  elaimed  that  when 
l)o\ver  is  generated  by  fuel  there  is  a  redueed  fuel 
hill— henee  a  g.-eater  distanee  obtained  per  ton;  the 
expense  of  enginemen  is  redueed;  the  eftieienev  of  the 
terminals  is  inereased,  sinee  the  ordinary  serviees  of 
coaling  and  watering  for  engines  is  not  neeessar>'  at 
terminals.  It  is  elaimed  further,  that  there  is  in- 
ereased power  during  eold  weather  for  the  reason  that 
the  eleetrie  motor  is  more  effieient  in  cold  weather 
than  in  hot.  There  is  inereased  tractive  power,  maxi- 
mum tractive  effort  being  obtained  from  the  start; 
and  there  is,  also,  a  reduction  in  marmal  labor. 
Whether  or  not  electric  traction  will  In?  used  depends 
primarily  on  the  volume  of  traffic  moving.  If  there 
is  a  large  volume  of  traffic,  it  will  pay  to  instal  the 
new  system  which  will  give  reduced  costs  on  each  unit 
moved.  If,  however,  the  volume  is  light  or  fluctuat- 
ing, it  may  be  more  economical  to  use  extra  pusher 
engines  since  these  engines  can  be  used  on  other  sec- 
tions of  the  system;  while,  with  the  electric  installa- 
tion, or,  for  that  matter,  with  any  other  permcnent 
haulage  improvement,  there  are  continuing  overhead 
expenses  attaching  to  the  section  improved,  regardless 
of  the  fluctuations  in  volume  of  traffic. 

11.  Economy  in  operation. — Various  tests  of  eco- 
nomical operation  present  themselves.  With  increase 
or  decrease  ii*  revenue  ton-miles,  how  does  the  reve- 
nue freight  locomotive  mileage  compare?  A  recent 
report  of  the  Boston  and  Maine  shows  an  increase  of 


\3tt)K: 


HAILWAV   l)i;Vi:i.()|\MK\T  57 

22.«  per  cent  in  revenue  ton-n.iJes,  with  only  an  in- 
crease of  14.2  per  cent  in  freiKht  loconuitiu'  miles. 
Ihe  si^uficance  .,f  the  freight  locoinc  tive  miles  is 
concerned  not  ojily  with  the  capital  cost  and  deprecia- 
tion of  the  locomotive  producing  these  miles,  hut  also 
with  the  fuel  consumption. 

The  cost  of  fuel  is  a  lar^re  item  in  the  expense  of 
railway  operation.     In  1923,  the  cost  of  coal  repre- 
sented 14  per  cent  of  the  operatiriK  expenses  of  Cana- 
dian railways.    In  1923,  the  consumption  in  Canada 
per  100  freight  locomotive  miles  was  8.5J)  tons,  cost- 
ing $50.60.     In  recent  years  hoth  consumption  per 
unit  and  costs  have  shown  a  tendency  to  increase. 
The  variation,  on  a  locomotive  mile  hasis,  for  differ- 
ent types  of  traffic  during  1923  mav  be  put  m  a  tab- 
ular form.^ 

CIas«>of  Consumption  C<,st  fx-r  looo-  p,.rec„t 

liomotive  ^" .'"*■!"""*"*'  """^'"^ '""^  "f  f'"'  «•••"- 

uHomoine  mile  in  lbs.  in  r.-nts  „         »• 

KreiKht     ,7.  ""^'  """'I'*'"" 

,,  ''-  50.6  1^11 

Passenger    94  ,- .,  "'•'•** 

^^'*^»>'"i^ '■■  uo  ;,ei  h:?" 

Other  tests  that  may  he  considered  are;  Is  there 
an  increase  in  revenue  tons  per  freight-train  milef 
Is  there  an  increase  in  the  train-load?  Is  there  an 
increase  in  revenue  tons  per  loaded  revenue  car-miL^ 

An  ajialysis  of  aver.„res  for  all  roads  at  different 
periods  is  interesting.     The  ton-mile  rate  for  1923 
was  9.87  mills  as  C(mipared  with  6.9  mills  in  1917 
Between    1917   and    1923,   the  average  loading  per 

'Computations  for  mixed  an.J  special  locomotive  mileages  are  <m.itted. 


M^ 


58 


INLAND  TRAFFIC 


loaded  car  increased  from  22.24  tons  to  '^.42  tons 
— an  increase  of  5..'1  per  cent.  The  averajife  train 
load  incr^'ased  m  the  same  {icriod  from  4.*t(»  tons  to 
.502  tons — an  increase  of  15  per  cent.  One  factor  of 
economy  is  the  slower  m(»vement  of  freight.  The 
C'aruidiaTi  Pacific  rule  is  tliat  no  freight  train  is  to 
run  a  mile  in  less  than  two  minutes.  Thru  the  econ- 
omy of  heavier  loadiiijr  it  is  possible  to  secure  a 
heavy  freight  tonnage  with  a  decrease  in  freight  train 
mileage  as  shown  by  the  fact  that  in  1917  while  this 
road's  freight  tonnage  exceeded  that  of  the  previous 
year  by  3.4  per  cent  the  freight  train  mileage  for  the 
same  period  decreased  8.r  per  cent. 

While  the  Canadian  Pa<'ific  favors  low  speeds  in 
freight  movements,  the  Michigan  Central,  on  account 
of  the  nature  of  its  freight  movement,  is  a  high  speed 
road.  The  (irand  Trunk  is  midway  between  these 
two  positions. 

13.  How  varuingH  are  measured. — In  measuring 
the  earnings  received  for  freight  and  for  passenger 
service,  it  is  the  custom  in  most  countries  to  use  statis- 
tical units  known  as  ton-miles  and  passenger-miles. 
The  ton-mile  is  made  up  of  the  total  number  of  tons 
hauled,  multiplied  by  the  average  distance  hauled. 
Similarly,  the  passenger-mile  is  made  up  of  the  total 
number  of  passengers,  multiplied  by  the  average  haul. 
By  dividing  freight  earnings  by  revenue  ton  mileage, 
the  receipts  per  ton  per  mile  are  obtained;  and  by  di- 
viding passenger  earnings  by  revenue  passenger  mile- 
age, the  receipts  per  passenger  per  mile  are  obtained. 


■^-f 


9fm^^  ili^fti^ 


RAILWAY  l)KVKIX)l»Mi:VT 

rkvjp:\v 


59 


One   ,n   order  ot    ti.e.r    importance   fho    products   carried    hv 
«n«d.a„    r«.lr«„d..      ^Vh.,,.    showed    the    ircatc.t    in  re  Z 

pt-rccntagc   .mportai.cc  during  the   period    1919-  li>i'j' 

How  irton  r;;  '^'*"";'"*'  *!i^  *"•  '""•^  ••-  '-"-"^^  -i'^? 

mined?  '""''^       "'"^    pas.<ngern.ik.    receij.t.    ..,  ,er- 


■i: 


'a/'- 


CHAPTER  IV 


'■  i 


PRINCIPLES  OI    IRKKillT  CLASSH'ICATION 

1.  Classification  fundamental. — A  shipper  of 
freight  must  acquaint  himself  with  the  freight  classifi- 
cation and  the  class  tariffs.  In  many  cases  he  must 
consult  commodity  tariffs  as  well.  Class  tariffs  and 
commodity  tariffs  are  considered  in  the  next  chapter. 
A  classification  is  a  ready  reference  list  of  the  articles 
of  freight  which  a  railway  holds  itself  out  to  carry  for 
the  public  offering  traffic. 

Logically  and  historically,  the  striking  of  the  rate 
comes  first;  but  in  practice  today  the  classification 
comes  first.  Industry  has  become  very  complex  and 
the  articles  offered  for  \rriage  are  many  and  diversi- 
fied. It  is  obvious  that  to  carry  in  a  tariff  by  specific 
reference,  the  names  and  rates  of  the  commodities 
which  the  railways  hold  themselves  out  to  carry  would 
make  the  tariffs  exceedingly  voluminous. 

2.  Early  tariff  classification. ~¥^ven  in  early  traffic 
conditions  it  was  recognized  that,  altho  the  arti- 
cles and  rates  to  he  carried  might  be  included  in  a 
single  sheet,  there  nmst  be  some  system  of  grouping 
and  differentiation  of  charge.  The  first  tariff  sheet 
in  the  United  States  was  issued  August  27,  181  (J,  by 
the  Lake  Champjain  Steaniboat  Company,  and  set 
out  the  following  articles  and  rates: 

60 


FREIGHT  CLASSIFICATION  gj 

Pot  and  pearl  asljes,  per  bbl. ...  ..,  ,, 

-Provisions  ptr  liundixd 'TlOO 

Flour,  pvr  bol '^•'5 

Firkins  of  butter  or  Jard. ^^* 

Tierces  of  seed  or  salt  .  .  .  . ^'^ 

Tierces  of  rice  ^-^^ 

All  otlKT  ar,i..U.  (excp,  bullion  orJpodoVper  ton.' :   fZ 

In  the  days  „f  wago,,  transportation  two  classes  wer. 
recognized-lijfht  an.i  heavy  articles      Tle'l 
the  fonner  were  assessed  on  thet^.e  ^.^^'Z 
at  er,  on  the  hun.hed  pounds.     As  late  as  th   lid  e 

Sf 'n  uLt^^  '"  -'  *--  varying  eon- 

um  needs,     ihe  groupin^r  adopted  was  usu- 

1847  will  show  this.     The  Nashua  an.I  Lowell  Jh^ 
was  fifteen  n.iles  In  length,  had  onlv  one  da  s    .nl 

oXr:  '■'"T"'  *'   ""  '<"'  '■"'"■  «-e  di    L^ce 

orate  aUh?nr"  '?""'"' "  '""•"^"'""  '""-  eiab- 
oiate,  altho  stdl  simple  grouping  was  made: 

I  Ml,  iron,  lurnlx-r  «,„|  ,„«„„re 4.  ,„„  ,  ., 

Heavy  morcli,u„lis..,  o.e  ,  suMr    «-lt    h/.tV  '    T'  '  ""''' 

••.■«ht  and  b„..,  ;n4„a„;H«:.V,V.;.«f ,„•■;«;•;  ,-;:■; ;™  ;;;■';; 

'-'fflit  and  bulky  nierchandi.se  and  dry  goods    *S  fi<2  n...  f 
tor  rbe  whol,.  distance  gooa.s,  .>}.f,^  jH>r  ton 

XV  c — 8 


Jj'-'f.e*! 


INLAND  TRAFFIC 


f 


The  Concord  also  had  two  classes. 

The  ratings  of  the  classification  are  either  for  less- 
than-carloads  (L.  C.  I^.) — that  is  to  say,  for  one  hun- 
dred pounds  or  for  multiples  of  one  hundred  pounds 
charged  as  a  multiple  of  the  hundred  pound  rate — or 
for  carloads  ( C.  L.)  •  When  no  distinction  is  made  in 
rating  in  respect  to  quantity  between  a  carload  and  a 
smaller  shipment  and  the  rate  is  the  same  per  hundred 
pounds  for  the  smaller  as  for  the  larger  shipment,  it 
is  called  an  any-quantity  rating.  An  any-tjuantity 
rating  enables  the  small  shipper  to  compete  on  fairly 
equal  terms  with  his  more  powerful  competitor. 

3.  Railwai/  contention  on  rating. — It  is  contended 
by  the  railways  that  when  carload  ratings  are  pro- 
vided, they  should  represent  a  legitimate  commercial 
necessity  and  a  genuine  carload  movement.  That  is 
to  say,  the  average  bulk  moving  should  be  such  as  to 
justify  the  C.  L.  rating.  From  the  standpoint  of  the 
railway,  it  is  articles  which  are  traffic  producers,  such 
as  fuel,  raw  materials,  productive  implements  or  ma- 
chinery, building  materials,  and  foodstuff's  other  than 
luxuries,  which  should  have  the  first  consideration  in 
g'-anting  C\  li.  ratings. 

The  railway  position  in  regard  to  the  conditions 
which  justify  granting  C.  L.  ratings  may  be  sunmia- 
rized  as  follows: 

It  is  to  the  interest  of  the  railways,  as  well  as  to  the 
public,  that  rates  be  low  enough — but  not  below  a  re- 
nmnerative  point — to  permit  the  general  movement 
and  distribution  of  commodities  in  general  demand  in 


i'      > 


FREIGHT  CLASSIFICATION  Qg 

large  quantities  for  constructio  ,  buildirj^,  iiuinufac- 
turirig  and  other  pu^x.ses.     It  is  a  sound  rule  for  rail- 
ways to  adapt  their  classification  to  the  hiws  of  trade- 
it  the  article  moves  in  sufficient  vohin.e  and  the  de- 
mands of  commerce  will  be  better  served,  it  is  reason- 
able to  give  it  a  carload  classifi<atK,n.     A  lower  rate 
for  carloads  than  that  apphed  to  s*,jpments  of  hght 
traffic  m  iess  than  carload  lots  should  (,e  recjuired  ouIn 
upon  circumstances  and  conditions  of  service  to  the 
large   hipper  so  dissin.ilar  as  t(,  re(|uire.  in  the  hue  of 
equal  treatment,  a  less  rate  than  is  made  for  the  small 
shipper.     When  a  claim  is  made  for  lower  rates  for 
carload  shipments  than  those  ai)plied  to  shipments  of 
light  traffic  in  less-than-carloads,  it  should  be  shown 
that  failure  to  apply  such  lower  rates  results  in  unjust 
discrimination. 

The  objection  of  the  railways  to  granting  all  com- 
modities C.  L.  ratings  is  in  great  degree  due  to  their 
fear  that  if  this  were  done  there  would,  thru  the  use 
of  the  mixing  privilege,  which  is  referred  to  later,  be  a 
')ml<ling  up  of  a  carload  composed  of  less-than-car- 
'oad  quantities.  Loc.ked  at  from  the  standpoint  of 
the  cost  of  the  service,  the  carload  movement  is  less 
'•nrdensome  than  the  less-than-carload  movement. 

While  in  the  early  days,  when  hauls  Mere  short, 
very  simple  grouping  was  possible,  and  while  it  was 
even  possible  for  a  single  sheet  to  set  out  both  the 
(•ommodities  and  the  rates,  moderr.  business  conditions 
and  the  increasing;-  length  of  the  haul  have  wrought 
great  changes.     So  complex  has  industry  become  and 


r 


I  i 

j       1. 

i 

64 


INLAND  TRAFFIC 


so  many  and  diversified  are  the  articles  offered  for  car- 
riage, that  the  customs  tariff  of  Canada,  with  its  772 
items,  is  short  and  simple  as  compared  with  the  Cana- 
dian Classification  which,  with  its  3,742  L.  C.  L.  rat- 
ings and  2,347  C.  L.  ratings,  covering  7,011  items,  en- 
folds a  group  of  commodities  stretching  from  acorns 
to  zinc  washers.  A  similar  complexity  is  to  be  found 
in  the  United  States,  where  the  Official  Classification 
carries  over  10,000  items.  In  the  Southern  Classi- 
fication there  were,  in  1909,  3,503  L.  C.  L.  and  703 
C.  L.  ratings;  in  the  Western  Classification,  .5,729 
L.  C.  L.  and  1,690  C.  L.  ratings;  while  the  Official 
Classification  in  1920  had  11,107  L.  C.  L.  and  4,910 
C.  L.  ratings. 

Under  such  conditions  the  attempt  to  include  in 
each  tariff  all  articles  whether  of  ac*tual  or  potential 
carriage  would  make  the  tariffs  bulky  and  cumber- 
some. In  the  item  of  printing  alone,  it  would  mean 
a  burdensome  expense.  It  is,  therefore,  necessary  to 
have  some  ready  reference  work  (like  the  Classi- 
fication) which  sets  out  what  articles  the  railway  is 
prepared  to  carry.  This  makes  the  tariff  simpler  and 
therefore  of  more  service  to  the  ship])er.  The  early 
examples  of  classification  which  have  been  referred 
to  show  that  it  was  appreciated,  tho  in  a  crude  way, 
and  that  it  was  unfair  to  charge  all  articles  alike. 
Moreover,  it  is  very  important  that  the  groupings  of 
thf*  ('la-:sific:!*i-'5P  he  relatively  reasimable. 

4.  Ifmc  vhiHHificnliouH  arc  built. — In  the  early 
days,  when    hauls   were   short   and   there   was    but 


FREIGHT  CLASSIFICATION  63 

little  interchange  of  traffic,  the  confusion  arising  fron. 
diversities  of  classification  was  not  so  serious  in  its 
effects,  but  when,  as  in  the  United  States,  thru  con- 
sohdation  of  existing  lines  and  additional  construc- 
tion, the  hues  of  railway  reached  steadily  into  the  in- 
terior, enabling  longer  hauls  to  be  made,  and  inter- 
change of  traffic  between  railways  became  necessary 
it  often  happened  that  different  portions  of  the  same 
railway    were    subject    to    different    classifications. 
Ihe  effect  of  this  may  be  seen  in  an  extreme  form  in 
the  situation  in  which  the  Wabash  Railroad  found  it- 
self m  1883.     In  that  year  it  had  in  effect  the  follow- 
ing classifications: 

N'o.  of  Cliisses  ill 

M'jji           ,  ,w,  Classifu-ation 

iddle  and  Western  States g 

Southern  Railway  &  Steamship  ....  .  jg 

Mississippi  Valley    ]  g 

Revised  Western q 

Trunk  Line,  Eastbound yi 

Trunk  Line,  Westbound 5 

Texas    

Pacific  Coast,  Eastbound.     q 

Pacific  Coast,  Westbound ■.■.;.•. '.  H,,tes  quoted  for 

each  article 
It    requires    no    elaboration    to    conclude    that    the 
slupper   unless  he  had  especial  facilities  for  keeping 
track  of  the  situation,  would  be  utterly  at  sea 

5.  Classifications  of  the  Vuitcd  Statcs.~By  1887 
there  had  come  into  existence  three  leading  Classi- 

Th    n«^**;'  ^^^'''''  *'^'  ^^"^**^^^"^'  ^^"^  t»>^-  VVestern. 
Ihe  Official  covers  traffic  in  the  territory  north  of  the 


I 


■  !, 


ii! 

J      'L 

66 


INLAND  TRAFFIC 


Ohio  and  Potomac  Rivers,  including  New  England, 
and  east  of  a  line  from  Chicago  to  St.  Louis  and  the 
mouth  of  the  Ohio  River.  This  is  the  densest  traf- 
fic territory  in  the  United  States.  The  Southern 
applies  east  of  the  Mississippi  River  and  south  of 
Official  territory.  The  Western  Classification  ap- 
plies west  of  Lake  Michigan,  the  Mississippi  River 
and  Official  Territory.  Occasionally  there  are  over- 
lappings  of  these  classifications;  for  example,  in  the 
case  of  a  shipment  to  or  from  a  point  near  the  bound- 
ary of  the  classification  territory  one  classification 
may  govern  thru.  Thus,  St.  Louis  uses  the  Official 
Classification  eastbound,  the  Western  westbound,  and 
the  Southern  southbound. 

AV'hile  there  has  been  a  movement  for  uniform 
classification  in  the  United  States,  the  diversity  of 
trade  and  traffic  conditions  has  so  far  prevented  the 
success  of  this  movement.  Consecjuently,  there  is  no 
necessary  uiiifcrr.ity  as  between  the  classifications, 
in  respect  of  either  rating  or  description.  A  step 
toward  uniformity  was  taken  wlien  on  December 
30,  1919  a  Consolidated  Freight  Classification  was 
adopted  in  the  United  States  bringing  together  in 
one  book  and  in  parallel  columns  the  facts  for  the 
Official,  Western  and  Southern  Classifications.  The 
Official  Classification  has  six  numbered  classes,  7  nml- 
tiples  of  first  class  and  two  "rules."  These  are,  in 
eff'ect,  additional  classes.  Rule  No.  2.5  includes  arti- 
cles rated  at  fifteen  per  cent  less  than  second  class,  and 


m 


FRLIGHT  C  LASSIFICATIOX  67 

Rule  Xo.  20  includes  those  rated  at  twenty  per  cent 
less  than  third  chiss.  The  Southern  CMassification 
has  SIX  numbered.  r(Hn-  lettered  classes  and  7  multi- 
ples of  first  class.  'IMie  Western  Classification  con- 
tains five  numbered  and  ttve  lettered  classes  and  7 
multiples  of  first  clasa. 

(5.  Ccnadinn  classification.— In  the  earlier  days 
chaotic  conditions  in  regard  to  classification  existed 
also  in  Canada.  The  various  small,  independently- 
operated  roads  had  each  its  individual  classification. 
In  1874,  the  class  rates  applying  from  station  to  sta- 
tion on  the  Grand  Trunk  were  governed  by  the 
'  (irand  Trunk  Railway  Classification  of  Freight." 
The  merchandise  classes,  which  were  four  in  number, 
scaled  as  follows: 

^^*  ^'as'* 200^;,   of  4th 

2n<l    cla'*^ 167^;    of  4th 

3rd  class i:j;jr/^    of   ^^jj 

-^tli    fJass 100' ;    of  4tli 

In  addition,  there  were  four  special  columns  govern- 
ing carload  rates  on  fiour  per  barrel,  grain  per  one 
hundred  pounds,  lumber  per  car,  and  live  stock  per 
car.  Various  other  items  were  scheduled  as  "same 
rates  as  flour,"  "same  rates  as  lumber,"  and  so  on. 
There  were  also  various  ratings  which  were  nuiltiples 
<.f  the  four  merchandise  class  ratings. 

The  Canadian  Classification  came  iuto  existence  in 
1884.  Tt  had  at  first  nine  classes;  it  now  has  ten. 
Rut  in  effect  it  may  be  said  to  have  sixteen,  for  the 
nudtiples  of  the  first  class  rating  must  also  be  noted. 


I 

i 


Mi 


! 


II 
f  \ 

i 
1, 


68 


INLAND    TRAFFIC 


There  are  the  ratings  U;  D-1  (double  first  class); 
2^1  (two  ami  one-half  tunes  first  class);  3-1;  3i; 
4-1.  The  Classification  is  built  up  on  the  fifth  class,' 
fourth  being  25  per  cent,  third  50  per  cent,  second  75 
per  cent,  and  first  100  per  cent  higher  than  fifth.  In 
the  first  five  classes  the  railway  loads  and  unloads, 
except  when  the  piece  or  package  weighs  two  thou- 
sand pounds  or  over;  from  the  sixth  to  the  tenth  class 
it  does  not. 

There  is  a  subdivision  of  Canadian  Classification 
territory,  known  as  Canadian  Freight  Association  ter- 
ritory; this  mcludes  Canadian  points  east  of  but  not 
including  Port  Arthur;  and  east  of  and  including 
Sault  Ste.  Marie,  Sarnia,  and  Windsor.  Westbound 
from  this  territory  to  points  in  Oregon,  Washington, 
and  North  Pacific  Coast  terminals  in  the  United 
States,  the  movement  is  subject  to  the  Canadian 
Classification. 

7.  Intcnmtiomil  traffic— The  international  trade 
movements  between  Canada  and  the  United  States, 
and  some  movements  in  Canada,  are  subject  to  the 
classifications  of  the  United  States.  In  a  summary 
way  the  leading  examples  are  as  follows: 
Official  Classification  applies — 

(a)  From  C.  P.  R.  stations  west  of  Montreal  to 
Montreal  for  export. 

(b)  Canadian  Freight  Association  territory  to  and 
from  Illinois,  Iowa.  Missouri. 

(c)  Canadian  Freight  Association  territory  to  and 


J-..' 


vn 


FREIGHT  CLASSIFICATION  69 

from    Louisiana,    Kentucky,    Tennessee,    Alabama, 
Florida. 

Southern  Classification  applies  to 

Canadian    Freight    Association    territory   to    and 
from  Alabama,  Florida,  Georgia,  Kentucky,  Miss- 
issippi, North  Carolina,  South  Carolina,  Tt-nnessee, 
and  Virginia. 
\V'estern  Classification  applies  to — 

(a)  Canadian  Freicrht  Association  territory  to  and 
from  British  Columbia. 

(b)  Same  territory  to  and   from  Arkansas  and 
Oklahoma. 

(c)  Same  territory  to  and  from  Rockv  Mountain 
States  and  west  to  the  Pacific. 

(d)  Cahfornia,  Nevada  and  Ftah  to  Manitoba. 
The  Railway  Act  recognizes  international  traffic  as 

a  complicating  factor,  for  it  provides  that  subject  to 
any  order  or  direction  of  the  Canadian  Railway  Com- 
mission any  freight  classification  in  use  in  tlic  United 
States  may  be  used  in  the  traffic  to  and  from  the 
i'nited  States. 

8.  E.rpnnmm  of  Canadim}  Cla-m ficaf ion. —The 
Canadian  Classification  has  steadily  increased  the 
number  of  items  as  business  has  expanded.  At  first 
there  were  simple,  broad  groups.  There  has  been  a 
progressive  differentiation  of  ratings.  This  is  shown 
ill  the  comparative  summary  of  ratings  that  follows: 


Year 
1884 
3913 


L.C.L. 
1,284 
3,74a 


C.L. 

6!22 

J2,347 


Any  Quantity 
459 
9252 


Hi 


■H' 


It 


I 


si! 


f 


If  ,  t 


'  - 


70 


INLAND    TRAFFIC 


\i    ; 


On  account  of  the  vai'icl\  of  articlt-s  covered  l)>  the 
classification  it  would  he  imp(i^sil)le.  without  cjuoting 
the  complete  classilication,  to  give  a  fulK  illustrative 
list.  For  the  purpose,  howevr,  of  illustrating  the 
way  in  which  the  groupiiiur  is  arranged,  th^'  foHowinn; 
examples  may  he  (juotcd  (see  also  specimen  page 
shown  on  page  72)  : 

Class  1.  Drygoods,  clothing. 

2.  Cotton  piece  goods. 

3.  Apples;  fish,  salted,  dried  or  smoked. 

4.  liUmher.  cement,  huilding  material. 

5.  Iron  pipe,  pig  iron,  horseshoe  nails,  green 

coffee,  paints,  etc. 

6.  Machinery,  agricultural  implements,  etc. 

7.  Railway  equipment. 

8.  Flour,  grain,  and  coarser  grain  products, 

potatoes,  and  vegetahles. 
"      9.  liive  stock. 

10.  I.umher  and  forest  products,  coal,  rough 
stone,  sand,  lime,  hay.  and  straw. 
As  examples  of  the  supplementary  classes  the  follow- 
ing may  he  quoted: 

\  -\.  Airplanes;  wicker  haskets  not  nested. 
.'}' — 1.  Canoes; three  or  more  crated  together. 

3 — 1.  Aquariums,  boxed;  baseball  bats  in  boxes. 
2i — 1.  Cutters   and    carryalls,   single   or    crated, 
over   34.   inches   high   and   less   than    72 
inches  long,  actual  weight. 
D — 1.  Binders,  s.  u.,  honey. 


ISij 


FRKIGHT  (  LASSIFICATION  71 

li.   Strawberry  baskets,  nested;  perfumery  in 
eases. 

9.  StatiHtical  rctunus  to  Govern  men  f.~T\w  form  in 
wh.eh  the  stati  tieal  returns  are  made  to  the  ^overn- 
iiient  does  not  differentiate  eonunodities  aceordinir  to 
the  elasses  of  the  classiHcation.  A  partial  re-.rroun- 
lyg,  however,  shows  the  followin^r  results :  » 


Hailwny 
Muh.  CVntral 
Fntcrcoloniiil 
(  an'n.    N'ortlM-rn 0.8     o.i 


UISTHIBITIOX  BY  CLASSKS 

.,  .     ,         ,        .  Per  n-iit  in 

•     -Ji   o.(,   9.-,    j,i   ().;,   jji    ,  _,   J^^       ^^     • 

•••    I*     0..>     8..i     „,.-,     „,,      ,„, 


<•»     i6.2 
"i      ».H      17.->      I.H     .U.H 


«8.0 

^^"'"'  r-"*^ '•«  0.^  ,u  0.5  ..0  ,1:3  3:5  S   ;i;; 

10.  QuanUt//  fJifercfwes.-The  Cnmxdhin   Classi- 
hcition,  in  eommon  with  other  dassi/ications,  recoir- 
n.zi  s  a  (hfference  in  (juantity  as  justitVinK  a  difference 
"»  nit.nu..     In  Kr.^rland  it  has  been  reeo^mized  that  in 
strikuiK  a  rate  a  railway  may  reeo^rn/.e  that  the  eom- 
"»od,ty  moves  in  Ia,-e  (,uantities.     Hut  in  Cana«h..  as 
HI  the  rnite^l  States,  the  earload  is  take.i  as  the  high- 
est unit  of  .iuantity.     The  shipper  who  moves  thirtv 
'•arloads  (](,es  not  reeeive  more  favorable  treatment 
tban  the  man  who  moves  one  earh.ad.     In  turnino-  at 
'■andom  the  pages  of  the  Canachan  Chissifieatinn  it 
will  be   found  that  eotton   pieee  .jroods  are  rated  2 
i-  C.  L.,  4  (\  I..;  or,  to  take  another  example,  canned 
ffocds  are  3  T..  C.  L..  .',  C.  L. 


MICROCOPY    RESOLUTION    TEST   CHART 

(ANSI  and  ISO  TEST  CHART  No.  2) 


■  61 

.■f       14.0 


2.5 


2.2 
1.8 


A  /APPLIED  INA^GE 

S^'.  1653   East    Main   Street 

g"-a  Rochester.   Ne«   rork         14609       USA 

'— ^  (716)    482  -  0300  -  Phone 

^S  ('■•6;    288  -  5989  -  Fax 


Iwraty-five  per  cent,  over  and  above  tbe  rates  herein  specified  shall  be  charged  for  tk« 
oarriase  of  all  articles  shown  m  this  Classincatiun  as  to  be  c^itiad  at  Ownet'a 
Risk  of  Weather,  Breakage,  etc.,  as  tne  cise  may  be.  if  tbd  same  are  re- 
quired by  shipper  to  be  carried  at  Gamer's  Kisk   (sed  Uule  7). 


s 

Classification  No.   15  Beads:— 

J 

Change  to  Sead:  — 

J 

1 

H 

a. 

a 

It 

6 

^ 

Date 

o 

a. 
•a 
a 

0 

J 

Kffprt- 

ive 

C 

J 

O 

Chemicals,      Drugs      and 

Chemicals,       Drugs      and 

Hedicinet— 

Medicines- 

Aci<l»    (See    Notes); 

Acids    (See   Notes): 

1 

16 

26 

Aoetlo: 

In    demijohns,    all 
p  o  T  e  r  p  <l   nitli 
wicker,  O.K.B.   . 

In    demlJolinH    cov 
ered  with  wicker 
and  pHfkert  with 
Rtraw  in  baskets. 
O.K.B 

In       demijohns, 

Dl 

IVi 

Acetic: 

In  demijohns  all  cov- 
ered with  wicker. 
O.R.B 

In    demijohns,    cork 
and     canvas    cov 
ered.    O.K.B.     ., 

In  deniljolins  coren  <\ 
with    wicker    and 
parked  with  straw 

Dl 

Dl 

* 

boxed,  O.R.B.    .. 

1 

3 

In   liaskets,   O.R.B 

IVa 

In  barrels    

3 

5 

In  demijohns,  boxed, 

O.R.B 

In   bsrrels    

1 

3 

3 
8 

2 

19 

3 

Cigarettes  and  Cigars — 

In    cases    s  e  c*u  >  e  1  y 

strapped,  or  with  Iron 

straps  or   clamps  on 

the   ends    

1 

Cigarettes  and  Cigars— 
In     cases     securely 
strapped  with  wire  or 
band  iron;  or  In  cases 
fastened   with  iron  or 
steel  key  clamps,  and 

In  oases,  not  strapped 

as  above    

D-1 

bonrds     forming     top. 

bottom   and   sides  sta- 

^ 

pled    topetlier   on    the 

inside,    and   so  stated 
b.v   shipper  on   bill  of 

J3 

in 

lading    

1 

In    cases,    not    fastened 

20 

27 

Crates,  Empty,  prepaid— 

^ 
** 

as  above    

Dl 

3 

Crates,    Empt.v,    prepnld  — 

L.C.L 

Dl 

10 

o 

S.f'..  C.L.  minimum  20,- 

C.L.,    minimum    20,000 
lbs 

be 

000   lbs 

D-1 

10 

^ 

D 

D 

4 

21 

50 

Detonators.— Subject     to 
Rule  10. 

Dry  Ooods — 

Eliminate    Item    .TO.    pagf 
21.— See  Item  4.  page  2 
of  this  supplement. 

9 

22 

5 

Bagging  and  Bags, 
N.O.S.:    In   bales.... 
Cloth. 

3 

5 

Dry  Ooods— 

Bags   and   bagging, 
N.O.S.:     in  bundles  or 

e 

22 

13 

Brattice— Same  as  Oil 
Cloth. 

bnles     

3 

5 

Cloth: 

Brattice: 

13  fret  long  and  over 

1 

Under  13  feet  long; 

In    bales   or    rolls 

3 

5 

E 

E 

7 

25 

8 

Equipment,  Hoadmaklng— 
Consisting    uf    carts, 
dump  cars,  dump 
wagons,   engines  and 
boilers,    g  r  n  il  e  r  h  , 
plows,  road  machines, 
road      rollers,      rock 
crushers,        srrnpers. 
stone-spreading   wag- 
ons,  tile   nioulils  and 
wheelbarrows,           in 
mixed   carloads    .... 

6 

Equipment,   Roadmaklng — 
Consisting  of  carts,  dunii> 
cars,  dump  wagons,  en 
gines  and  bolUrs,  grad- 
ers,   plows,    road    nia 
chines,     road     rollers, 
rock    crushers,    scrap 
ers.        stone-spreading 
wagons,    street-sprlnk- 
ling      wagons,      street 
sweepers,    tile    moulds 
and    wheelb«rrows.    In 
mixed   pdrlonds 

e 

Specimen  Page  From  Caxadian  Freight  Classificatiox 


*'-«l^7>Mr  •W.t^fVtif  T 


niEIGHT  CLASSIFICATION 


7» 


The  L.  C.  L.  rating  is  for  one  hundred  pounds  or 
upward.  In  the  case  of  "smalls,"  or  shipments  under 
one  hundred  pounds,  no  matter  what  the  class  might 
otherwise  be,  the  charge  is  the  same  as  that  for  one 
hundred  pounds  first  class,  with  a  mininmm  charge  of 
35  cents.  The  railways  take  the  position  that  on  ac- 
count of  the  bookkeeping  and  handling  costs  inciden- 
tal to  such  small  shipments,  a  charge  for  one  hundred 
pounds  at  the  class  rating  to  which  it  belongs  would 
not  be  adequate. 

Fourth  class  is  the  lowest  L.  C.  L.  rating  in  the 
Canadian  Classification.  As  is  indicated  in  the  fol- 
low tabular  summary,  it  comprises  only  the  heavier, 
coarser  and  cheaper  commodities: 


L.C.L.     C.L. 

Iron  and  steel  ...  4  - 

Fire  brick 4  -  10 

Cement    4  -  10 

Plaster    4  -  10 

Pitch  and  tar.  .  .  4  -     T 

Asphalt 4  _     7 

Caustic   soda.  ...  4  _     5 

<^]oal    4  _  10 

Fertihzcr    4  -  10 


L.C.L 
Building  and  roof- 
ing paper   ....  4 

Salt 4 

Potash     4 

Flour 4 

(iraiii     4 

Oil  cike 4 

Pickled    meat   and 

h'->h     4 

Sugar    4 


C.L. 


5 

10 
5 

8 
8 
8 


5 


—     .} 


11.  Follow  Lot  Rule— Under  the  Classification 
an  overflow  quantity  less  than  a  carload  mav  under 
definite  conditions  obtain  the  carload  rate      The  rule 
governing  this  is: 


Wh 


ere  more  than  the  minimum  carload  weight  of  freight 


f 


§■ 


I 


rv-.'-.-t    •T:'-E     ar.>v 


74 


INLAND  TRAFFIC 


classifying  5th  class  or  higher  in  carloads  and  provided  the 
classification  minimum  is  not  less  than  24,000  lbs.  per  car 
not  exceeding  36  ft.  6  in.  in  length  is  shipped  on  the  same 
da}-  by  one  consignor,  on  one  bill  of  lading,  to  one  con- 
signee at  one  destination,  the  established  rate  for  a  carload 
will  apply  on  the  entire  consignment,  although  it  may  be  less 
than  two  or  more  full  carloads,  provided  that  such  car,  ex- 
cept the  car  carrying  the  excess,  must  be  loaded  to  its  visible 
or  marked  capacity. 

In  order  to  obtain  the  advantage  of  a  car-lot  rating 
it  is  not  necessary  that  one  should  load  up  to  the  full 
carrying  capacity  of  the  car.  But  it  is  necessary  to 
furnish  a  minimum  weight. 

The  position  taken  by  the  railways  in  regard  to 
minimum  weights  is  put  succinctly  in  a  statement 
made  by  the  Chairman  of  the  Canadian  Freight  As- 
sociation in  a  case  before  the  Board: 

All  articles  are  provided  with  a  less-than-carload  rating, 
but  only  those  which  are  generally  and  to  some  extent  for- 
warded in  straight  carload  quantities  are  given  the  carload 
rating.  ...  In  order  to  entitle  a  shipper  to  the  lower  car- 
load rating  when  it  is  provided  in  the  classification,  the  rules 
require  that  a  full  straight  carload,  subject  to  certain  mini- 
mum weights  which  are  designed  to  produce  adequate  }>er  car 
revenue,  be  forwarded  by  one  shipper  from  one  station  on 
one  day  to  one  consignee  and  destination.  .  .  . 

Where  the  character  of  the  freight,  size  of  the  package, 
method  of  packing,  weight  of  the  goods,  strength  or  fragil- 
ity, vary  so  greatly,  it  is  impossible  to  fix  by  rule  a  minimum 
weight  which  will  in  all  cases  exactly  correspond  with  (and 
not  in  some  cases  exceed)  the  actual  quantity  which  can  con- 
veniently be  put  into  a  car.  It  is  impracticable  by  rule  to 
confer  the  benefit  of  the  carload  rate  without  the  use  of  a 
minimum  weight.     In  the  case  of  heavy  coarse  freight,  the 


'  jt**i"-85''£'--  fti.  .••• 


r-'^-ei^'m^  '^sm^.i^.'^msiS: 


FREIGHT  CLASSIFICATION  75 

shipping  public  finds  no  difficulty  in  loading  up  to  and  even 
in  excess  of  the  niinin.u.u  weight.  There  are  no  co.n.nercial 
transactions  winch  .nterfere  with  this  being  complied  with. 
In  the  case  of  hght  bulky  freight,  the  weight-carrying  ca- 
pacity of  the  car  .s  disregarded,  and  the  loading  capacity 
generally  deternnnes  the  niinin.u.n  ..eight,  but  always  subjec^t 
to  Its  appl.cat.on  resulting  in  a  fair  per  car'revenue.     This 

r  lirf  A  7  ''"^"'  ,*"  ^''''''^  *''^  necessity  of  hauling  a 
l.gh  ly  loaded  car  and  to  obtain  economy  in  the  use  of  equip- 

n^Vv'^^""':*":-  ^  '--*han-carload  consigZ  ^t 
s  charged  for  its  actual  weight  at  the  higher  less-tlmn-car- 

inlfh  '  "f '^  ^'•'•'"''^^  '^^'^'  ^-^^^^^^  *h-  charge  based 
upon  the  carload  minimum  weight  and  carload  rate,  in  which 
eyent  the  lower  charge  governs.     At  no  time  does  a  charge 

thrsimTcW^'^^"^'  ^^*  '''''''  '''  '''''''  ^-  ^  -^'-^  '^ 

The  classification  provides  that  unless  otherwise 
specifically  provided  for  m  the  classification,  the 
minimum  weight  in  box  cars  not  over  36  feet  6  inches 
in  length  is  to  be  as  follows  (actual  weight  to  be 
charged  for  when  in  excess  of  the  minimum)  — 

1st,  2nd  and  3rd  class 20,000  lbs.  per  car 

7th,  8th  and  10th ^0,000  lbs.  per  car 

On  specific  items  in  the  classification  there  may  be 
nnnimum  w-  .ts  differing  from  those  just  quoted. 
10  quote  a  few  examples:  lumbermen's  boats  and 
bateaux  have  a  tenth  class  rating,  with  ..  minimum 
of  20  000  lbs.,  while  boats  X.  O.  S.  (not  otherwise 
specified)  have  a  sixth  class  rating,  with  a  minimum 
ot  20,000  lbs.;  concrete  spreading  carts  with  a  fourth 
class  rating  have  a.ijiinmum  of  14,000  lbs.,  and  char. 


76 


INLAND  TRAFFIC 


coal,  with  a  seventh  class  rating,  has  a  minimum  of 
24,000  lbs. 

12.  Car  measurements. — The  box  car  not  over  36 
feet  (>  inches,  inside  measurement,  8  feet  6  inches  wide 
and  8  feet  high,  inside  measurement,  is  taken  as  the 
standard  box  car;  but  as  the  car  increases  in  length 
the  Canadian  Classification  increases  the  minimum. 
The  same  thing  is  done  by  both  the  Official  and  West- 
ern Classifications.  In  the  two  former  the  increase 
in  the  minimum  does  not  increase  in  regular  gradation 
as  the  length  of  the  car  increases,  while  in  the  Western 
Classification  the  rule  is  ft  Mowed,  in  the  case  of  light 
and  bulky  goods,  of  adding  for  each  foot  over  36  feet, 
inside  measurement,  three  per  cent  to  the  minimum. 

The  question  of  the  increased  minimum  is  not  con- 
cerned with  increased  length  alone:  there  is  also  the 
question  of  increased  height  of  the  ca-.  While  the 
standard  box  car  is  8  feet  high,  inside  measurement, 
or  13  feet  6  inches  from  the  rails,  special  cars,  as,  for 
example,  furniture  and  automobile  cars,  are  higher. 
There  has  been  submitted  to  the  Board  a  proposition 
that,  in  the  case  of  light  and  bulkv  goods,  the  cubical 
capacity  of  the  car  should  be  looked  to  and  a  minimum 
fixed  on  it,  and  that  for  every  one  hundred  cubic  feet 
over  twenty-five  hundred  cubic  feet  of  containing 
space  there  should  be  a  percentage  addition.  The 
Wisconsin  Railway  Commission,  in  dealing  with  the 
three  per  cent  scale  of  the  Western  Classification,  has 
expressed  the  opinion  "it  would  seem  that  the  cubic 


.  J- 

I 


FRKIGHT  CLASSIFICATION  77 

capacity  of  the  cars  is  „  better  basis  for  adjusti„« 
minima  than  length  ale  le.'  "jusiing 

13  Cost  ofC.  L.  and  L.  C.  L.  shipment.s.-WKx^ 
the  placing  of  a  higher  rating  upon  an  I,    C    I 

practice,  there  is  a  question  as  to  whether  there 
ZnU^l  1  differentiating  these  two  traffie  ZZ 
ments  that  the  apparent  discrinJnation  is  not  "un- 
just       It  may  be  said  that  the  small  shipment  is  a 

Tne "  BrrH"."';'*  r  '"«^  ''^  '-^'^^^ 

^un'dame"  '"^""'''°"  "»'^^''  '^  ■"-*  ^  "- 

l.,5r'l*  *'?**"  .''  relatively  much  less  costly  to 
handle  than  less-than-car-lot  traffic.  I„  the  former 
the  loadmg  per  car  is  relatively  heavy,  thus  materially 
reducing  the  proportion  of  dead  weight  to  the  nav 
weight.  When  it  is  loaded  and  unloaded  by  the  ship- 
pers  as  compared  with  the  less-than-car-lot  traffic  it 

'It'"'  r^  ''''  '"P""'"  '■"  *■"=  '"'5'  of  station- 
office,  and  other  services.    In  western  Canada,  the  Ca- 
nadian Pacific  estimated  some  years  ago  that  the 
physical  cost  of  handling  L.  C.  L.  traffic  from  shed 
...or  .mtil  ,t  IS  sto«-ed  in  the  car  was  from  3.,  cents 
to  .f.1.00  per  ton.     The  time  it  takes  to  assemble  a 
tar  must  also  be  considered.     At  AVinnipeg  or  Cal- 
Sary.  for  example,  cars  are  spotted  every  dav  for 
<erta,n  sections  of  the  railway  and  for  certain  pi ,  es 
on   the   railway.     The   car  stands  at   the   shed    .11 
.lay.  then  goes  out  in  the  morning  on  the  wav-freight 
tram.  *         ° 

XV  c— 7 


mr^T^m^'i^mM^^'^-if-M^^ 


78 


INLAND  TRAFFIC 


M 


The  Wisconsin  Commission  has  estimated  that  in 
the  State  of  Wisconsin  the  average  car-lot  loading  is 
17  tons,  while  in  the  case  of  less-than-car-lot  traffic  the 
average  loading  per  car  does  not  reach  6  tons.  It 
then  continues : 

On  one  of  the  principal  carriers  in  the  Western  Classifica- 
tion territory  the  average  terminal  cost  per  cwt.  amounts  to 
about  2.3  cents,  when  the  loading  amounts  to  17  tons  per 
car,  and  to  almost  5.8  cents  when  the  loading  amounts  to  7 
tons  per  car,  while  the  average  cost  of  moving  the  freight 
between  the  stations  amounts  to  about  0.26  mills  per  cwt. 
when  the  car  is  loaded  with  17  tons,  and  to  about  0.44:  mills 
per  cwt.  when  it  is  loaded  with  7  tons  of  freight.  On  these 
bases,  for  a  haul  of  two  hundred  miles,  there  is  a  difference 
in  favor  of  the  carload  traffic  that  amounts  to  about  7  cents 
per  cwt. 

Summing  up  the  matter,  it  expresses  the  opinion : 

We  feel  quite  justified  in  saying  that  the  less-than-carload 
traffic  is  relatively  less  i)rofitable  to  the  carriers  than  the  car- 
load traffic,  and  that  the  higher  rates  for  the  former  are 
more  than  offset  by  the  greater  cost  of  handling  it. 

The  difference  as  between  less-than-carload  and 
carload  ratings  is  justified  by  differences  in  cost. 

REVIEW 

What  is  a  classification,  and  why  is  it  necessary? 

What  is  an  any-quantity  rating,  and  how  does  it  help  the  small 
shipper  ? 

Give  the  railway's  position  with  regard  to  conditions  whicli 
justify  C.L.  ratings. 

How  many  classes  has  the  Canadian  Classification?  How  is 
it  built  up? 


:! 


FREIGHT  CLASSIFICATION 


79 


the 


What  is  the  highest  unit  of  quantity  used  in  makinir  ship 
ments?  What  is  an  L.C.L.  rating?  How  is  the  charge  for  th. 
small  shipment  arrived  at? 

What  are  the  arguments  for  and  against  higher  rates  on  L.C.L 
than  on  C.L.  shipments? 


Ji 


CHAPTER  V 

FEATURES  OF  CANADIAN  FREIGHT  CLASSIFICATION 

1.  Uniformity  in  Canada. — The  attempts  of  the 
United  States — so  far  successful  only  in  part — to 
ohtain  a  uniform  classification  applicahle  thruout  the 
entire  section  served  hy  the  railways  of  that  country, 
are  indicative  of  the  advantage  both  to  the  shipper  ani 
to  the  railway  of  uniformity  of  practice.  While  in 
Canada  there  is  one  general  classification,  certain 
modifications  nmst  be  recognized  which,  in  certain  re- 
spects, create  one  minor  and  two  general  classifica- 
tions. 

On  the  White  Pass  and  Yukon  route,  connecting 
Skaguay  and  White  Horse,  shipments  are  governed 
by  the  Northern  Classification.  In  this  classification 
there  are  three  general  ratings.  A,  B  and  C,  A  be- 
ing the  lowest.  In  addition,  there  are  the  follow- 
ing multiples  of  these  classes,  /!>,  %,  1,  iM;,  2,  2V-i,  3 
and  4)  times  A. 

As  has  been  indicated,  the  Canadian  Freight  Classi- 
fication is  built  up  on  fifth  class.  But  while  in  West- 
ern Canada,  outside  of  the  Yukon,  the  principle  of 
having  ten  classes  is  followed,  the  method  of  building 
is  different.     In   Western   Canada,  when   the   Ca- 

80 


'^■■jL-ji.ii'/-Ti~iA-.  ..Tr^jf  ,■ 


CANADIAN'  FREIGHT  CLASSIFICATION       HI 

iiadiaii  Pacific  began  operation,  the  elassifieation 
uhich  was  adopted  was  the  Joint  Northern,  whiih  at 
that  time  was  being  used  in  the  Dakotas  and  the  ad- 
joinitig  United  States  territory.  In  this  chissiHea- 
tion,  first-chiss  was  (loul)le  fourth.  There  was  no 
percentage  rehition  as  to  the  intervening  chisses. 
Later,  when  other  chisses  were  athled,  no  percentage 
I)asis  of  relation  of  these  was  adopted;  and  so,  while 
seemingly  uniform,  the  classification  in  ^Vestern 
Canada  is  out  of  line  with  that  in  use  in  Eastern 
Canada. 

2.  Mijring  priviUge.~ln  deabng  with  the  question 
of  minimum  weights,  it  was  for  the  moment  referred 
to  as  if  straight  carloads  of  a  single  commodity  alone 
were  involved.  But  m  addition  to  a  mininmm 
weight  made  up  of  one  article  alone,  there  may  be  a 
mininmm  weight  arrived  at  by  mixing. 

in  Eastern  Canada  the  arrangement  as  to  mixing 
may  be  summarized  a^     )llows: 

(a)  When  a  number  c.  articles  of  the  same  ehss  in 

carloads  are  tendered  on  one  day  by  one  con- 
signor, destined  to  one  consignee,  the  quantity 
being  sufficient  for  a  carload,  they  take  the 
rate  per  hundred  pounds  of  the  class  at  the 
highest  minimum  of  any  of  the  articles  so  car- 
ried. 

(b)  When  the  articles  are  of  different  classes,  the 

rate  and  minimum  of  the  article  in  the  highest 
class  applies. 
(e)    In  a  mixed  carload  of  the  fifth  and  higher  class 


in 

% 


mt^ 

5^^^^= 


I 


.ZM.:i  ■.•'4.' 


82 


INLAND   TRAFFIC 


freight  having  a  iiiiniinuni  of  less  than  20.000 
lbs.,  a  niininiuni  of  20,000  lbs.  at  the  highest 
class  rate  applies. 

For  obvious  reasons,  there  are,  in  dealing  with  cer- 
tain commodities,  such  as  petroleum,  lubricating  oil. 
gasoline  and  live  stock,  limitations  of  the  general 
mixing  privilege. 

The  mixing  privilege  is  limited  to  articles  which 
have  a  distinctive  car-lot  rating,  which  means  that  in 
a  majority  of  cases  less-than-carload  quantities  may 
be  combined  to  obtain  the  advantage  of  carload  rates. 
At  times  an  application  for  a  C.  L.  rating  is  made, 
not  because  it  is  expected  that  the  commodity  will 
move  in  carload  quantities,  but  because  with  such  a 
rating  it  can  form  part  of  a  mixed  car,  thus  obtaining 
the  advantage  of  the  carload  rate.  Effervescent  f)r 
Health  Salts  are  rated,  any  quantity,  first  cla  s;  Ep- 
som Salts  are  classed  3  and  5.  Application  was 
made  to  give  Health  Salts  the  same  rating  so  that, 
being  handled  by  wholesale  grocers,  they  may  enjoy 
the  mixing  privilege  undc/  the  grocery  list.  Tiie 
Board  refused  to  change  the  r.'  *^'  .g. 

In  Western  Canada,  however  the  mixing  privilege 
is  limited  by  the  adoption  of  the  principle  of  trade 
lists.  The  clfissificaiion  states  that  "articles  under 
distinctive  headings  will  not  be  taken  in  mixed  car- 
loads at  carload  rates."  "Distinctive  headings"  as 
set  out  in  the  classification  are,  for  example,  agricul- 
tural   implements,    hardware    and   groceries.      The 


^'!^ 


ffidtL^ti 


■m 

1 


CANADIAN  FHKIGHT  CLASSIFK  ATION 


83 


same  provisions  apply  in  the  \\  st  as  do  in  the  Kast, 
(a)  where  the  articles  are  of  tlie  same  ehiss,  (h) 
where  the  artieles  are  of  (lJf!Vient  ehissci. 

a.  hjfj'cct  on  Mhippcrs  and  ronsumcrti.—'Vhv  etfeet 
of  this  is  that  there  is  a  much  wider  vn\\u^  privilege 
east  of  Port  Arthur  than  west  of  it.  In  KasterFi 
Canada  the  system  redounds  to  tlie  advantage  of  the 
consignee  who  cannot  take  straight  carload  of  a 
particular  line  of  goods.  In  Western  Canada,  the 
rule  existing  redounds  to  the  advantage  of  the  U'an 
wh6  can  take  a  straight  carload  of  a  particular  line 
of  goods.  The  rule  as  to  limitation  to  distinctive 
headings  applies  not  only  to  shipments  hetween 
l)oints  in  the  West,  hut  also  to  shipments  hetween 
points  east  and  west  of  Port  Arthur. 

The  difference  in  situation  as  hetween  the  East  l  1 
the  West  in  this  respect  may  be  indicated  by  a 
specific  example.  A  mixed  carload  of  hoe  M.nvils, 
and  cultivators  is  possible  east  of  P.^t  Arthur.  In 
Western  Canada,  tools  and  hand  farm  implements 
aie  in  the  hardware  list  under  fifth  class,  while  the 
cultivators  are  in  the  agricultural  machinery  list  with 
a  sixth  class  rating.  Consequently,  on  such  a  ship- 
ment from  an  Ontario  point  to  a  point  west  of  Port 
Arthur,  the  sixth  class  rating  would  apply  on  a 
minimum  of  20,000  pounds  for  the  cultivators  and 
the  L.  C.  L.  rate  vi^ould  be  charged  on  the  tools  and 
hand  implements.  If,  however,  the  tools  and  hand 
implements  formed  the  bulk  of  the  shipment,  they 


%H 


84 


INLAND  TRAFFIC 


would  move  on  a  fifth  class  rating  with  a  minimum  of 
24,000  pounds,  and  the  other  articles  would  move  on 
an  L.  C.  L.  rating. 

4.  Divergent  trade  interests  secure  compromise 
classification. — The  effect  of  this  is,  that  in  respect  of 
distributive  business,  there  are  really  two  classifica- 
tions. 

This  situation  has  grown  up  as  a  result  of  a 
compromise  between  divergent  trade  interests.  In 
the  classification  of  1893,  the  mixing  privilege  was 
limited  by  the  list  principle.  Various  modifications 
were  subsequently  made.  By  1897,  the  general 
practice  established  was  the  same  as  it  is  east  of  Port 
Arthur  today.  In  1902,  the  list  principle  was 
adopted  generally.  In  1904,  an  attempt  was  made 
to  obtain  the  open  r  jle  for  the  whole  of  Canada.  In- 
stead, there  was  vorked  out  the  compromise  which 
gives  two  S3'stems,  as  has  already  been  indicated. 

The  compromise  was  attributable,  in  the  main,  to 
the  increasing  importance  of  the  jobbing  business  of 
Western  Canada.  British  Columbia  and  Eastern 
Canada  wanted  a  generous  mixing  system :  Winnipeg 
did  not  favor  it.  A  dozen  years  ago,  the  manufac- 
turers of  Eastern  Canada  were  pleading  before  the 
Board  for  more  generous  treatment  to  mixed  carload 
lots,  with  a  view  to  the  furtlier  development  of  a  job- 
bing business  thruout  the  Northwest.  To  this,  Mr. 
J.  H.  Ashdown  of  Winnipeg,  whose  prominence  in 
the  mercantile  world  made  his  utterance  significant, 


I 


CANADIAN  FREIGHT  CLASSIFICATION        85 

rejoined  that  such  an  application  was  entirely  in  the 
-nterest  of  the  Eastern  jobbers.     These,   he   said 
were  merely  birds  of  passage  coming  to  Winnipeg 
when  t,n,es  were  goml  „„,!  leaving  when  they  were 

th.^W  Tl  ''''*"*""■'!"   "'"'■'•*-T;>e  expansion  of 
the  West  has  led  to  the  building  up  of  new  distribut- 
ing centers      In  1901.  the  bulk  of  the  distributive 
busmess  m  the  West  was  done  either  from  Eastern 
Canada  m-  from  Winnipeg  westward  on  the  one  hand. 
...  from  Victoria  or  Vancouver  eastward  on  the  other. 
Between  Wimnpeg  and  the  Rockies,  Calgary  and 
Edmonton  were  the  largest  wholesale  points;  but  their 
busmess  was  small.     Since  1901,  there  have  grown 
up  m  the  Prairie  Provinces,  west  of  Winnipeg,  such 
d.stnbutmg  centers  as  Portage  la  Prairie,  Brandon, 
Regina,  Moose  Jaw,  Swift  Current,  Medicine  Hat 
Camrose,    Yorkton,    Saskatoon,    Wevburn.    Leth- 
bndge     In  British  Columbia,  there  are,  in  ad.lition 
to  Victoria  and  Vancouver,  Revelstoke,  Kamloops, 
•Nelson  and  V^ernon. 

6.  Long  and  short  hauls  for  Prairie  centers  -The 
I  .aine  distributing  centers,  once  develope<l,  began  to 
emphasize  the  advantage  of  getting  close  to  the  con- 
suming point  on  a  long  hiul  movement  with  a  rela- 
tively short  haul  out  on  carload  or  less-than-carload 
niovemeuts.  Such  points  are  so  situated  that  the- 
can  have  the  advantage  of  the  long  haul  rate  on 
straight  carloads,  then  distributing  out  on  the  short 


I,-   :■  ■  :,i 


86 


INLAND  TRAFFIC 


hauls.  Winnipeg,  on  the  other  hand,  has  now  the 
long  haul  to  it  and  tlie  relatively  long  distributing 
haul  out. 

7.  Jobbing    businesses    and    classifications. — The 
complexities  introduced  by  jobbing  businesses,  their 
bearing  upon  classifications  and  the  mixing  privi- 
leges thereunder  are  illustrated  by  recent  develop- 
ments.    The  Boards  of  Trade  of  Calgary,  Moose 
Jaw,  Weyburn,  Lethbridge,  Saskatoon  and  Regina 
desire  a  further  modification  of  the  rule  as  to  mixing 
as  it  now  applies  west  of  Port  Arthur.     They  point 
out  that  jobbing  centers  are  now  established  at  cen- 
tral points  in  the  Provinces  of  Manitoba,  Saskatche- 
wan and  Alberta,  and  contend  that  reasonable  pro- 
tection should  be  given  to  these  centers  to  do  the 
business  which  is  naturally  tributary  to  such  points. 
At  present,  shippers  of  small  lots  may  combine  their 
shipments  and  secure  carload  rates  on  what  would 
otherwise  be  carried  at  broJ^-en  lot  rates.     In  the  case 
of  groceries,  mixtures  are  permitted  on  over  300  arti- 
cles running  from  alum  to  washtubs.     This,  it  is 
claimed,  is  unfair  to  the  western  wholesale  merchants. 
It  is  admitted  that  there  may  have  been  some  justifi- 
cation at  an  earlier  date  for  maintaining  carload  rates 
to  retailers.     The  contention  now  is  that  there  is  "no 
further  necessity  for  violating  the  principle  of  giv- 
ing to  the  purchaser  of  a  carload  all  the  protection 
that  the  Railway  Classification  and  tariffs  intended 
he  should  have.     At  present  it  is  possible  for  the 
shipper  of  one  package  to  secure  as  low  a  rate  as  the 


CANADIAN  FREIGHT  CLASSIFICATION       87 

shipper  of  any  number  of  carloads."  It  is,  there- 
fore, contended  that  the  following  rearrangements 
should  be  made:  carload  rates  should  be  confined  to 
carload  quantities  of  one  commodity  or  of  commodi- 
ties of  analogous  character;  that  the  minimum 
weight  for  each  class  of  commodity  should  reasonably 
approximate  the  carrying  or  cubical  capacity  of  a 
standard  car  with  due  regard  for  the  marketing  con- 
ditions of  the  articles  in  question;  that  the  present 
basis  of  trade  lists  should  be  abolished  and  carload 
rates  applied  only  on  carload  quantities  of  one  com- 
modity, or  one  or  more  commodities  of  an  analogous 
character. 

8.  Edmonton  objects  to  edicusion  of  miring  privi- 
lege.— In  objecting  to  any  extension  of  the  mixing 
I)rivilege,  the  Board  of  Trade  of  Edmonton  in  deal- 
ing with  a  cognate  matter  used  the  following 
language : 

...  (it)  would  work  irreparable  injury  to  the  wholesale 
interests  of  Edmonton,  and  would  be  the  means  of  transfer- 
ring to  wholesale  houses  in  Toronto,  Hamilton,  Montreal 
and  Winni})e|T  a  considerable  volume  of  trade  now  enjoyed  by 
wholesale  centers  west  of  Winnipeg.  It  is  contended  as  un- 
reasonable that  wholesalers  situated  fifteen  hundred  or  two 
thousfind  miles  away,  or  even  eight  hundred  miles  with  no 
organization  in  the  territory  affected  and  no  investment  in 
the  way  of  buildings  or  stocks,  should  expect  to  be  placed  in 
as  advantageous  situation  to  do  western  business  as  those 
houses  which,  under  the  encouragement  afforded  by  Classifi- 
cation No.  16  (i.e.,  by  the  list  system),  have  invested  their 
capital  and  developed  facilities  on  the  spot  for  taking  care 
of  that  trade. 


88 


INLAND  TRAFFIC 


9.  Distributive  business,  a  question  of  balance. — 
As  will  be  seen  in  dealing  with  the  question  of  rates, 
the  matter  of  distributive  business  and  the  settlement 
of  distributive  areas  is  a  question  of  balaneing. 
Each  jobbing  center,  while  contending  for  the  geo- 
graphical advantage  of  its  situation,  is  chary  in  defin- 
ing the  limits  of  its  sphere  of  influence.  And  thus 
while  merchants  of  the  West  are  contending  for  a 
rearrangement  of  the  mixing  rule  which  will  give 
them  the  longest  possible  haul  in  carloads,  and  a 
distributive  business  on  the  short  hauls  in  less  than 
car  lots,  points  such  h>  Vancouver,  Winnipeg,  Fort 
William,  Toronto  and  Montreal  are  opposed  to  the 
further  modification  which  has  been  outlined.  Mont- 
real, for  example,  desires  that  the  open  rule  should 
apply  generally  thruout  Can.cda. 

10.  Factors  affecting  classification. — As  Ex-Com- 
missioner Clark  of  the  Interstate  Commerce  Commis- 
j^ion  has  aptly  said : 

Classification  is  not  an  exact  science  nor  may  the  rating 
of  a  particular  article  be  determined  alone  by  the  yardstick, 
the  scales  and  the  dollar.  The  volume  and  desirability  of 
the  traffic,  the  hazard  of  carriage,  and  the  probability  of 
misrepresentation  of  the  article  are  large  factors  of  prime 
importance  in  classification.     At  best  it  is  but  a  grouping. 

Consideration  of  tlie  earlier  examples  of  classifica- 
tion, to  which  reference  has  been  made,  indicates  that 
at  least  three  determining  factors  were  considered — 
space,  weight  and  value.  It  was  considered  that 
where  an  article  could  be  packed  solidly  into  a  com- 


mm 


IV 


.1 

i   ' 


CANADIAN  FREIGHT  CLASSIFICATION        89 

paratively  small  space  it  wa^  proper  to  make  a  lower 
charge  tlian  when  the  same  weight  took  up  a  mud. 
larger  space.  And  the.e  was  also,  in  a  somewhat 
crude  way,  a,,  attempt  made  to  take  into  considera- 
t.on  the  l,as,s  of  value  or  ahility  to  pay.     Todav, 

I"'''';''!  ""'"•^'  '•'^«"'^"'<^nt'<  of  elassifieation. 
these  tlnce  lactors  are  still  of  n.uch  importance. 

Whdc  the  scope  of  the  elassifieation  has  hecome 

more  mclusne  as  business  has  expanded,  and  while 

he  ratings  have  at  the  same  tin.e  become  more  dif- 

lerentiated,  ,t  ,s  in.possible  to  have  a  class  for  each 

art^le.     Consequently,   the   class   groupings,   wMe 

ntended  to  embrace  an.-ogous  articles,  do  not  em- 

hrace  articles  necessarily  identical  in  point  of  value 

cost  of  carriage  or  other  factors. 

11.  Value  of  the  article.~Tbe  value  of  the  article 
IS  recognized  as  an  important  factor.  From  the 
»tandpo,„t  of  cost  of  service,  it  does  not  appear  justi- 
hable  to  class  gloves,  whalebone,  thread  and  umbrel- 
as  in  first  L.  C.  L.,  while  common  brick,  concrete 
huilding  blocks  and  coal  are  classed  fourth  L.  C.  I.. 

H  f^.^^^f'  ^'  ''''*'"^*  ""■^  considered  it  will  be  found 
that  the  first  group  of  commodities  extracted  from 
the  dry  goods  list  have  an  any-(]uantitv  rating,  while 
common  brick,  stone,  building  blocks  and  coal  have  a 
tenth  class  rating  C.  L. 

If,  however,  an  attempt  were  made  to  arrange  the 
ratings  r,,  he  basis  of  the  cost  of  service,  assuming 
tiiat  this  could  be  accurately  established,  the  result 
"ould  be  that  the  low-grade  omniodities  which  are 


.'.     <%■•■'    *-jJi|j!Hi«iwt*jr«iyi»i.»p  1  J 


90 


INLAND  TRAFFIC 


placed  in  tenth  class  would  be  able  to  stand  only  a 
short  haul  movement.  Under  these  circumstances, 
such  commodities  would  be  monopolized  locally  with 
a  resultant  disadvantage  to  the  consumer.  As  a  re- 
sult of  this,  value  is  recognized  as  a  factor,  and  ability 
to  pay  places  certain  articles  in  the  first  class  and 
c»thers  in  the  tenth. 

In  so  arranging  connnodities,  cognizance  is  taken 
of  the  fact  whether  the  articles  are  in  the  rough, 
partly  finished  or  finished  state.  Millstones  in  the 
rough  are  classed  L.  C.  L.  third,  C.  L.  fifth;  when 
finished  they  are  classed  second  and  fourth.  While 
dimension  or  building  stone  in  the  rough,  sawn  or 
dressed,  not  carved,  is  fourth  and  tenth,  it  is  first 
and  fifth  when  carved  or  lettered,  crated  or  boxed. 
Or,  again,  difference  in  quality  is  recognized.  Thus, 
while  brick — common,  fire,  vitrified  and  scoria  blocks 
— is  rated  fourth  and  tenth,  enameled  and  glazed 
brick  is  third  and  fifth. 

In  dealing  with  the  classification  of  bla.igas,  the 
Board  found  that  the  ratings  of  second  and  fourth 
were  reasonable,  this  conclusion  being  based  on  a  con- 
sideration of  the  article  and  of  its  ability  to  pay  as 
compared  with  the  lower  ability  to  pay  of  the  articles 
classed  third  and  fifth,  which  were  the  ratings  asked 
for.  So,  also,  where  a  carload  rating  wiis  asked  for 
on  cigars,  which  have  an  any-quantity  rating  of  first 
class,  it  was  held  that  as  cigars  were  luxuries  the  any- 
quantity  rating  was  not  unfair.     A  similar  position 


i 


1 


CANADIAxN  FREIGHT  CLASSIFICATION       91 

was  taken  in  dealing  with  an  application  to  reduce  the 
rating  of  cut-glass  from  douhle  first  to  first  class. 

On  a  complaint  that  prepared  roofing  was  improp- 
erly classed  L.  C.  L.  3,  C.  L.  5,  while  plain  felt 
for  roofing  was  classed  4  and  5,  it  was  pointed  out 
that  there  was  a  wide  range  of  prepared  roofing— 
that  it  sold  by  the  square  of  100  feet  at  wholesale 
prices,  varying  from  70c  to  $2.56  per  square.    Com- 
mon saturated  felt,  with  which  comparison  was  made, 
sold  wholesale  at  from  26c  to  82c  per  square  of  100 
feet.     But  even  tho  the  highest  quoted  price   for 
felt  overlapped  the  lowest  price  for  prepared  roof- 
ing, it  was  recognized  that  the  general  range  of  value 
of  the  "roofing"  was  much  higher,  and  it  was  held 
that,  from  this  standpoint,  it  was  not  improperly 
classified. 

In  using  value  as  a  basis,  there  is  considered  not 
only  the  ability  to  pay,  but  also  the  market  value  of 
the  article.  That  is  to  say,  where  an  article  has  a  high 
market  price,  the  higher  rating  has  but  a  slight  per- 
centage effect  tipon  the  market  demand.  But  in  the 
case  of  articles  of  wide  demand  and  consequently 
lower  market  price  the  higher  rating  would  add  such 
a  percentage  to  the  market  price  that  the  demand 
would  be  curtailed.  Consequently,  as  a  matter  of 
self-interest,  the  ratings  must,  within  certain  broad 
limits,  recognize  ability  to  pay  as  a  factor. 

12.  Bulk  and  weight.— As  the  railways  in  trans- 
porting freight  are  selling  car  space,  what  can  be 


I 


m 


■^ 


92 


INLAND  TRAFFIC 


packed  in  a  given  space  is  important.  There  must  be 
considered  whether  the  articles  are  K.  D.  (knocked 
down)  or  S.  U.  (set  up).  Sheaf  carriers,  S.  U.,  are 
D-1,  while  K.  D.  they  are  second  class,  these  ratings 
being  for  L.  C.  L.;  while  lumber  wagons  are  first  class 
S.  U.  and  second  class  K.  D.  Another  consideration 
is  whether  the  articles  are  loose  or  in  bulk,  including 
in  this  the  consideration  as  to  whether  they  are  crated 
in  boxes  or  otherwise  packed.  A  variety  of  ratings 
will  be  found  based  on  the  difference  in  packing. 
Thus  in  the  tin  and  tinware  list  the  following  will 
be  found: 


Tinwc.re,  N.O.S.: 

L.C.L. 

Loose,  O.R.D D-1 

Not  nested,  in  crates,  boxes  or  barrels.  .  1 
Nested,  in  crates,  boxes  or  barrels ....  2 
Nested  solid,  in  crates,  boxes  or  barrels .        3 


C.L. 

6 
5 
5 
5 


Other  considerations  falling  under  the  heading  of 
bulk  and  weight  are,  whether  the  commodities  are  in 
L.  C.  L.  or  C.  L.  shipments  and  questions  of  min- 
imum weights.  Lamp  chimneys  have  a  rating  of 
second  and  fifth,  with  a  minimum  of  20,000  pounds. 
It  may  be  noted  that  while  the  ncrmal  fifth  class  min- 
imum is  24,000  pounds,  the  load  weight  of  these  goods 
will,  on  account  of  their  being  light  and  bulky,  very 
seldom  reach  20,000  minimum,  normally. 

13.  Risk  attached  to  carriage. — A  railway  is  an  in- 
surer, and  so  the  risk  attaching  to  the  carriage  of  the 


CANADIAN    FREIGHT    CLASSIFICATION      93 

goods  is  considered.    Scattered  thruuut  the  classifica- 
tion will  be  found  the  following  notations: 


--  <)wnrr\ 

risk 

')f  hreakajre. 

rr-             ** 

tt 

"    chafing. 

— _             ** 

»t 

"    (lamaffe. 

— .             *' 

»4 

"   diterioration 

ti 

t« 

"    fire. 

.            (t 

ii 

"    loss. 

*( 

ti 

"    leakage. 

rrir 

*' 

"    sifting. 

. .  ,               *4 

•ft 

"    weather. 

O.K.!'.. 

O.U.C. 

O.R.D. 

O.U.Dit. 

O.R.F. 

O.R.L. 

O.R.Lkge. 

O.R.S. 

O.R.W. 


When  these  owner's  risk  notations  appear  in  the  class- 
ification, the  railway  is  relieved  of  the  risks  necessar- 
ily incidental  to  the  transportation  of  the  article  so 
noted.    But  it  is  not  relieved  of  the  liability  for  any 
loss  or  damage  which  may  result  from  any  negligence 
or  omission  of  the  railway,  its  agents  or  employes. 
If  a  shipper  does  not  wish  to  ship  at  "owner's  risk  " 
then  the  articles  proffered  by  him  will  be  carried  sub- 
ject to  the  terms  of  the  Standard  Bill  of  Lading,  but 
subject  to  the  addition  of  25  per  cent  to  the  rates 
appiymg  when  the  goods  are  carried  at  "owner's 
risk." 

Particular  examples  of  the  classification,  consider- 
ing the  risk  attending  transportation,  are  plentiful 
Green  vegetables  O.  R.  Det.,  in  baskets,  bags  or 
cTates,  are  first  class  L.  C.  L.,  while  evaporated  or 
«iesiccated  vegetables  are  third  class  L  C.  L.  in  bags 
'oxes,  or  barrels.    The  rating  is  affected  bv  the  ques-' 
tion   of  whether   the   commodity   is   liquid   or   dry 
J^iquid  shellac  in  tins,  boxed,  is  first  and  third,  while 

XV  c-8 


94> 


INLAND  TRAFFIC 


fk 


dry  shellac  is  second  and  fourth.  In  the  rating  of 
acids,  there  has  to  he  taken  into  consideration  not  only 
the  risk  of  hai'  iling  with  reference  to  the  goods  them- 
selves, hut  also  as  to  other  property.  Special  care 
must  he  taken  hi  handling  them. 

14.  FaciliticH  and  equipment  /Tr/«//Tr/.— While 
the  nature  of  the  facilities  recjuired  has  a!i  important 
hearing  on  the  rate,  it  also  affects  the  conditions  at- 
taching to  the  classification  rating.  Apples  ami  po- 
tatoes nmst  he  prepaid,  in  winter. 

In  arranging  classilication,  the  matter  of  tonnage 
movement  is  important.  While  low-grade  commod- 
ities nmst  have  a  low  rating  in  order  to  move  at  all, 
the  fact  that  a  commodity  moves  in  large  hulk  facili- 
tates the  low  rating  arrangement.  The  (luestion  of 
competition  of  markets  is  a  factor,  too.  So,  also,  is 
the  competitive  effect  exercised  by  alternate  water 
routes. 

In  dealing  with  classification,  the  question  of  anal- 
ogy plays  an  important  part.  A  change  in  the  rat- 
ing of  an  article  will  create  a  demand  for  a  change 
in  a  complementary  commodity.  While  aluminum 
and  copper  wire  are  distinct  commodities,  they  are 
both  complementary  and  competing;  so  we  find 
them  both  with  a  rating  of  secom  -id  fourth.  The 
lists  of  the  classification  have  grown  up  out  of  t\w 
varied  needs  of  business  and  to  disregard  these  is  to 
upset  business.  In  the  grocery  list,  we  find  not  only 
flour,  sugar,  jams  and  jellies,  but  also  glue  and 
tobacco.     In  1911,  the  Canadian  Freight  Associa- 


CANADIAN  FREIGHT  CLASSIFICATION       95 


tion,  iictiiij^  for  tlie  Canudiuti  railways,  proposed  n 
rearraiigeiiient  of  the  ratings  on  tobaeeo.  Tlie  most 
important  part  of  this  rearrangen.^.it  was  the  substi- 
tution of  a  fourth  ehiss  earload  rating  for  the  existing 
fifth  ehiss  rating.  Jn  evidei  ee,  it  was  shown  that  84 
per  cent  of  the  output  of  phig  tobaeeo  of  the  Domin- 
i(  n  Tobaeeo  Company  and  over  00  per  cent  of  its  cut 
tol)aeeo  was  disposed  of  to  the  groeery  trade.  Tlie 
Ontario  WhoJ-sale  Ciroeers'  (iuiM  testified  that  from 
«0  per  eent  to  85  per  cent  (vf  the  toliaeeo  sohl  was 
handled  by  grocers,  and  that  the  tobaeeo  business  was 
about  ten  per  eent  of  the  total  trade  of  the  grocers. 
The  result  of  the  proposed  change  wouUl  liave  been  a 
dislocation  ot  business,  since  tobacco  and  groceries 
would  no  longer  have  been  able  to  mix  on  a  fifth  class 
rating.  The  Board,  in  ruling  on  the  matter,  said: 
"In  view  of  the  dislocation  which  the  proposed  in- 
creased ratings  would  cause,  it  would  be  necessary  for 
the  railways  to  make  out  a  strong  affirmative  case. 
This  they  have  not  done  .  .  .  and  their  application 
should  be  dismissed." 

It  is  impossible,  without  going  into  tedious  detail, 
to  enumerate  all  the  factors  which  determine  the 
classification  ratings.  As  a  fairly  compendious  sum- 
mary, there  may  be  quoted  the  following  extract  from 
the  Annual  Report  of  the  Interstate  Conmierce  Com- 
niission  for  1897: 

(there  is  considered)  whether  commodities  are  crude,  rough 
or  finished ;  liquid  or  dry ;  knocked  down  or  set  up ;  loose  or 
in  bulk  ;  nested  or  in  boxes  or  otherwise  packed ;  of  vegetables 


■y'i 


96 


INLAND  THAFFIC 


whether  green  or  dry,  desiciMited  or  evaporated ;  the  market 
value  and  shippers'  represent  at  ions  as  to  their  character; 
the  cost  of  service,  length  and  duration  of  haul;  the  season 
and  manner  of  8liij)ment;  the  space  occupied  and  weight; 
whether  in  carlo  .d  or  less-than-carload  lots;  the  value  of 
annual  shipments  to  be  calculated  on;  the  sort  of  car  re- 
quired, whether  flat,  gondola,  box,  tank,  or  special ;  w  hether 
ice  or  must  be  furnished:  the  speed  of  trains  necessary 

for  pcrishaHe  or  otherwise  rush  goods;  the  risk  of  handling, 
either  to  the  goods  themselves  or  other  property  ;  the  weights, 
actual  and  estimated;  the  carriers'  risk  or  owners'  release 
from  damage  or  loss. 

l,j.  ClanHification  in  operation  in  Canada. — The 
Railway  Act  provides  that  the  railway  shall  keep  on 
file,  at  the  stations  where  freight  is  received  and  deliv- 
ered, a  copy  of  the  freight  classification  or  classifica- 
tions in  force  upon  the  railways  for  inspection  during 
business  hours.  The  Board  is  given  wide  powers  in 
dealing  with  the  c  lassification.  These  are  set  forth  in 
Section  321  of  the  Railway  Act,  which  provides: 

The  tariff  of  tolls  for  freight  traffic  shall  be  subject  to  and 
governed  by  that  classification  which  the  Board  may  pre- 
scribe or  authorize,  and  the  Board  shall  endeavor  to  have 
such  classification  uniform  thruout  Canada,  as  far  as  may 
be,  having  due  regard  to  all  })roper  interc«ts  The  Board 
may  make  any  special  regulations,  terms  and  conditions  in 
connection  with  such  classification,  and  as  to  the  carriage  of 
any  particular  commodity  or  commodities  mt  ntioncd  therein, 
as  to  it  may  seem  expedient.  The  company  may  from  time 
to  time,  with  the  a])proval  of  the  Board,  and  shall,  when  so 
directed  by  the  Board,  place  any  goods  specified  by  the  Board 
in  any  stated  class  or  remove  them  from  any  one  class  to  any 
other  higher  or  lower  class.  Provided  that  no  goods  shall 
be  removed  from  a  lower  io  a  higher  class  until  such  notice 


m 


1 


CANADIAN  FUEIGIIT  C'l.ASSIFU'ATION        97 

Hs    the    Hoard   tJek'nniius    lm.s    l>...ii    givt-n    in    tla-   Canada 
iiazctti'. 

The  classification  is  revised  trom  time  to  time.  It 
is  issued  at  irregular  intfjrvals.  Down  to  date  there 
have  hcf'ii  sixteen  issues.  Hetween  issues,  supple- 
ments are  issued  to  take  care  of  changed  ratings. 

While  the  Board  of  Railway  Conunissioners  for 
Canada,  popularly  spoken  of  as  the  Railway  C'onunis- 
sion,  has  power  to  initiate  changes  in  classification, 
normally  it  does  not  act  on  its  own  initiative,  but  on 
cv.  .iplaint.  The  initiation  of  the  classification  or  of  a 
supplement  thereto  is  in  the  hands  of  Lhe  Canadian 
Freight  Association,  acting  for  the  railways,  and 
more  particularly  the  Advisory  Committee  thereof. 

As  has  been  seen,  the  increased  ratings  have  in  be 
published  in  the  Canada  Gazette.  The  Board  hy  its 
order  of  January  18,  1909,  provided  that,  in  filing 
changes  of  classification,  this  material  should  be  sub- 
mitted in  proof-sheets  setting  forth  a  list  of  the  articles 
not  previously  provided  for,  wliich  it  is  proposed  to 
add  to  the  classification  and  the  ratings  for  these 
articles.  Further,  it  was  directed  that  information 
should  be  given  as  to  the  proposed  advances,  retluc- 
tions  or  other  changes  in  rules,  ratings  or  nnriimum 
weights.  In  making  application  as  to  changes,  it  is 
rccjuired  that  the  reasons  should  l)e  set  out.  As  an 
I'xample  of  reasons  given,  the  following  dealing  with 
Lath,  iron  or  steel,  in  bundles,  crates  or  boxes,"  may 
he  referred  to: 


II 


i 
I 

m 


98 


INLAND  TRAFFIC 


This  material  has  several  uses  chief  of  which  is  for  plas- 
tered walls.  In  this  it  takes  the  place  of  expanded  metal  or 
wooden  lath.  Coming  in  conipetition  with  expanded  metal  of 
about  the  same  value  and  transported  under  the  same  general 
conditions,  there  should  be  no  difference  in  the  ratings,  and 
third  class  L.C.L.  seems  reasonable  and  should  we  think,  be 
permitted, 

16.  New  issues  of  classifications. — Any  proposed 
new  issue  of  the  Classification,  or  any  proposed  sup- 
plement thereof,  must  be  submitted  in  printed  proof 
form  for  the  approval  of  the  Board  before  it  becomes 
effective.  If  the  new  issue  or  supplement  increases 
a  classification  rating,  notice  that  the  Classification 
or  supplement  has  been  submitted  to  the  Board  for 
its  approval  must  be  ^iven  in  two  issues  of  the  Canada 
Gn  rfte.  It  is  required  that  the  proof  shall  show 
under  the  heading  of  "additions,"  articles  not  pre- 
viously classified  and  the  pro])osed  ratings  therefor; 
also  new  rules  or  regulations  which  it  is  proposed  to 
add  to  the  Classification.  Tndcr  the  heading  of 
"Changes,"  proposed  increases,  or  reduced  ratings,  or 
changes  in  the  existing  rules  or  regulations  must  be 
set  out,  there  })eing  included  in  a  parallel  column  those 
previously  a})])roved  by  the  Hoard. 

The  application  to  the  Board  is  to  be  accompanied 
by  a  statement  of  the  reasons  for  proposed  changes 
involving  increased  transportation  charges.  At  the 
same  time,  it  is  retiuired  that  there  be  furnished 
to  each  of  some  54  representative  industrial  associa- 
tions and  Boards  of  Trade  a  copy  of  the  proof  and  of 


it 


I 

"H 


CANADIAN  FREIGHT  CLASSIFICATION       99 

the  notice  of  publication,  with  the  re([uest  that  fully 
explained  objections,  if  any,  to  the  prop>.»e(l  changes 
involving  increased  transportation  charges  be  Hied 
with  the  Board  within  thirty  days  from  the  receipt  of 
said  proof  and  notice. 

17.  Board's  participation  in  tiassifwations, — In- 
stead of  dealing  with  the  classification  after  it  is  made, 
the  Board  may  be  said  to  participate  in  its  making. 
After  representations  are  received  from  the  various 
trade  bodies,  it  is  usual  to  arrange  a  conference  be- 
tween the  railways  and  the  representatives  of  the 
trade  organizations.  At  this  conference,  the  Chief 
Traffic  Officer  of  the  Board  is  also  present.  The 
matters  at  issue  are  discussed,  and  an  attempt  is  made 
to  arrive  at  a  conclusion.  The  Chief  Traffic  Officer 
reports  to  the  Board,  which  deals  with  the  unsettled 
(juestions,  if  there  are  any.  When  this  has  been  done, 
an  order  is  issued  authorizing  the  coming  into  effect 
of  the  classification. 

18.  False  classification  and  complaints. — False 
classification  of  freight,  either  l)y  a  railway  or  its  em- 
ployes, or  by  a  consignor  or  consignee,  with  a  view 
either  to  give  or  to  obtain  carriage  of  goods  ac  lower 
than  the  rates  legally  in  force,  is  punishable  for  each 
offense  by  a  penalt}-  not  exceeding  $1,000  and  not  less 
than  $100. 

From  time  to  time,  an  individual  may  complain  of 
the  classification  as  fixed.  For  example,  a  manufac- 
turer of  explosives  desired  paraffin  wax  to  be  given  a 
rating  under  chemicals.     lie  made  application  to  the 


100 


INLAND  TRAFFIC 


Advisory  Committee  of  the  Canadian  Freight  Associ- 
ation which  did  not  see  fit  to  accede  to  his  request. 
F  apphcation  to  the  Board  the  matter  was  set  down 
for  hearing  and  a  direction  was  given  that  the  revised 
rating  should  he  granted. 

Since  classification  is  tied  up  with  rate-making,  and 
since  the  changing  of  an  article  from  one  class  to  an- 
other is  etjuivalent  to  a  change  in  the  rate,  it  is  es- 
sential that  any  organization  regulating  rates  should 
have  an  efficient  control  over  classification  as  well. 

REVIEW 

What  is  the  mixing  privilege  and  to  what  articles  is  it  limited  ? 
How  is  it  applied  in  Eastern  and  in  Western  Canada? 

What  objection  has  been  made  to  the  extension  of  the  mixing 
privilege  ? 

Name  the  principal  factors  in  railway  classifications  and  de- 
fine the  influence  of  each. 

How  is  a  freight  classification  changed  and  what  regulations 
govern  a  new  issue? 

If  you.  as  a  merchant,  wanted  to  complain  about  a  classification 
how  would  you  proceed? 


CHAPTER  VI 


FREIGHT  RATES 

1.  Importance  of  freight  traffic.— In  the  fiscal  year 
er  A  December  31,  1923,  the  tariffs  filed  with  the 
Board  totalled  68,892.  Of  these,  53,096  were  freight 
tariffs.  That  is  to  say,  177  freight  tariffs  were  filed 
every  working  day.  These  tariff's  are  concerned  not 
only  with  traffic  lying  wholly  within  Canada,  hut  also 
with  the  transit  business  in  which  both  Canada  and 
the  United  States  participate.  The  tariff's  vprv  in 
size  from  a  transcontinental  tariff,  with  its  more  than 
a  hundred  pages,  to  a  supplement  of  a  single  sheet. 

In  a  new  coun.ry  such  as  Canada,  where  a  sparse 
population  is  spread  over  u  large  territory,  the  i-eceipts 
from  freight  traffic  largely  outrank  those  from  pas- 
senger business.  The  following  tabular  summary 
gives  the  principal  items  of  railroad  earnings  for  the 
calendar  years  noted : 

19^?!  1923 

•'''•eight     (if).7«i  7o.:}0 

Passenper    Ifl.H?  17.7(5 

Sleeping  cars   1.0(i  i.oi 

•^^ail    1..5fi  1.55 

Kxpress    :j.45  ^.j^ 

Misc.   rail    1.15  1  |>j 

Water  lines    ().«5  0.60 

Incidental    j.74  u.29 

.Joint  facilities   (credit   balance)    0.01  0.02 

101 


102 


INLAND  TRAFFIC 


!  A 


Bulking  passenger  revenues  and  revenues  inci- 
dental thereto  in  1928  on  rail  line  movements,  $3.85 
were  earned  from  freight  for  every  dollar  from  pas- 
senger business. 

2.  Tonnage  and  mileage  service. — In  Canada,  in 
the  period  from  1919  to  1923,  the  gross  earnings  from 
freight  increased  by  24  per  cent.  The  tonnage  and 
mileage  service  i)erformed  afford  a  measure  of  what 
the  railways  are  doing.  The  following  table  puts  the 
matter  for  a  period  of  years  in  a  summary  manner: 


1919 
oil 


\920 
250 

19.83 
23.05 


1921 

258 

447 
20.22 
22.12 


1922  1923 

280  288 

481  502 

20.88  21.41 

23.03  23.42 


Average  haul,  miles 

Average  tons  per  train ^Sl 

Average  loaded  cars  per  train 19.55 

Average  tons  per  loaded  car  22.21 

But  for  the  shorter  hauls  and  lighter  loadings  of 
the  smaller  lines  the  averages  here  shown  would  be 
higher.  As  an  example  of  the  position  of  the  longer 
lines,  reference  may  be  made  to  the  Cam  dian  Pacific 
which,  in  1922,  had  an  average  haul  of  402  miles  and 
an  average  tons  per  loaded  freight  car  of  27.1. 

The  increase  in  general  in  the  aveiage  haul  is  an 
index  of  the  rapidly  expanding  railway  network  of 
Western  Canada.  In  the  period  in  question,  there  is 
an  increase  in  the  average  loading  per  car.  But  tak- 
ing the  average  car  at  forty  tons  capacity,  in  1923. 
over  forty  per  cent  of  the  carrying  space,  on  the  av- 
erage, was  empty. 

G.  Railway  rates  of  universal  interest— The  funda- 


»! 


FREIGHT    RATES 


103 


mental  part  that  transportation  plays  in  all  countries 
and  the  greater  importance  of  freight  traffic  in  a  new 
country  has  caused  much  discussion  as  to  the  proper 
basis  of  rates,  and  especially  of  freight  rates.  While 
certain  phases  of  competition  have  an  effect  on  railway 
transportation,  there  are  also  limitations  of  competi- 
tion. In  a  sense  this  is  becoming  more  and  more  true 
of  all  modern  industry,  and  the  easy-going  ideas  as  to 
^'  e  pervasive  effects  of  competition  which  developed 
Ht  a  time  when  industry  was  not  organized  on  a  large 
scale  and  large  investments  of  capital  were  urmeces- 
sary  are  now  being  shocked  into  a  readjustment. 

In  the  case  of  the  railway,  its  service  is  as  funda- 
mental in  modern  industrial  life  as  electric  light  and 
water  services  and  street  cars  are  in  the  routine  of  the 
city  dweller.    Any  interference  witli  the  efficiency  of 
the  transjjortation  system  is  of  far-reaching  conse- 
quence.    A  congestion  at  a  frontier  terminal  creates 
a  fear  of  a  coal  famine.    The  large  mass  of  the  people 
is  in  one  way  or  another  affected  by  the  transixi-t  of 
commodities  on  the  railway.     Few,  nowadays,  lead 
tile  hermit  life.     Xot  only  are  we  dcperjdent  on  the 
railway  in  the  normal  distributive  process,  but  we  are 
greatly  dependent  on  it  in  our  maladjusted  distribu- 
tive organization  which  is  characterized  by  wastes  of 
transportation.     "^Vhen  we  ship  Eastern  Townships 
l)utter  to  Vancf         •  Island  ."-i  I  Xcw  Zealand  butter 
to  Ottawa,  Xew  Zealand  pom  try  and  mutton  to  the 
interior  valleys  of  Biitish  Columbia,  and  eggs  from 


[I  ( 


104 


INLAND  TRAFFIC 


Ontario  to  Regina,  it  is  but  little  wonder  that  the 
freight  rate  elicits  active  discussion. 

4.  Competition. — Not  only  is  the  rate  a  matter  of 
wide  interest;  the  nature  of  the  railway  transportation 
business  is  also  hnportant.  In  a  letter  which  Leland 
Stanford  wrote  to  the  San  Francisco  Chamber  of 
Commerce  in  1873,  he  said :  "Whenever  undue  prof- 
its upon  an  investment  in  railroads,  or  any  other  cor- 
porate property  accrue,  other  capital  will  always  be 
found  to  enter  into  the  same  business  to  share  such 
profits,  and,  by  competition,  to  reduce  them  to  a  legiti- 
mate standard."  On  the  other  hand,  J.  J.  Hill,  in  his 
evidence  befor'  the  Interstate  Commerce  Commission 
in  1902,  said:  "Competition  does  not  lower  rates; 
on  the  contrary,  it  advances  them.  In  the  North- 
west, where  for  twenty  years  the  Northern  Pacific 
and  the  Great  Northern  have  been  at  peace,  where  one 
road  has  agreed  with  the  other  on  rates  and  maintained 
the  agreement,  rates  are  lower  than  in  any  other  part 
of  the  country." 

Railways  are  not  operating  in  a  frictionless  eci)- 
nomic  ether,  as  Stanford  naively  suggested.  The> 
are  forced  by  their  nature  to  come  into  some  kind  of 
relationship.  A  dry-goods  merchant,  dealing  with  his 
customers,  is  not  dependent  upon  the  other  merchants 
concerned  in  local  trade.  He  may  do  more  than  a 
local  trade  without  demanding  any  cooperation  with 
other  merchants.  It  is  true  that  the  pursuit  of  his 
trade  demands  a  cooperation  with  the  wholesale  mer- 
chant.    But  within  the  limits  of  his  retail  business  hi^ 


FREKiHT  HATKS  ,05 

^     relationship  to  other  merchants  is  not  one  of  eoonera- 
tion,  hut  of  competition. 

5   Transportation    compared   :cHh    mcrchamVmnn 
and  manufactnrinf/.-A  merchant  nmsi,  of  course  he 
prepared  to  supply,  within  limits,  the  goods  demanded 
l)y  his  customers,  within  the  time  specified.    A  railwiv 
IS  engaged  m  selhng  services,  and  readiness  to  serve  {"s 
herefore  essential  to  its  husiness.    A  merchant,  while 
he  must  be  ready  to  serve,  has  the  opportunity  of  a<l- 
justmg  h,s  stock  to  seasonal  demands,  and  in  ^o  doing 
he  has  the  opportunity  to  turn  over  his  capital     A 
manufacturer  may  conceivably  accunmlate  a  surplus 
stock  of  goods  to  meet  a  later  demand.    It  is  patent 
that  a  railway  cannot  create  service  in  advance  of  de- 
niand.    It  has  to  be  prepared  to  provide  service  when 
and  how  demanded.    This  readiness  to  serve  is  repre- 
sented m  locomotive  and  freight  car  units. 
I      A  striking  example  of  this  is  afforded  by  the  west- 
:  ern  grain  movement     The  grain  begins  to  move  ahciut 
I  two  and  a  half  months  before  the  close  of  navigation 
on  the  Great  Lakes,  and  everj-  effort  has  to  be  made  to 
^vt  the  grain  forward  to  Fort  William  and   Port 
-Arthur.    Consequently,  the  railways  must  be  ready  to 
;  meet  a  peak-load  in  a  short  period  of  time.    On  Sen- 
I  tember  29,  1913,  the  Canadian  Pacific  handled,  in  ami 
I  2  ^Winnipeg,  5.014  cars  of  grain.    On  the  same 
J  ^.rfe  thirty-eight  trains  of  grain  were  dispatched  from 
I  ^^  mnipeg  m  ten  hours,  or  an  average  of  one  train 
jeuTy  sixteen  minutes.     In  order  to  meet  this  peak- 
Moad,  the  railway  must  have  not  only  a  number  of  cars 


106 


INLAND  TRAFFIC 


sufficient  to  carry  the  grain  peak-load,  but  also  suf- 
ficient for  the  ordinary  business  of  the  railway.     Were 
it  possible  to  e(iualize  the  grain  movement  over  the 
year,  it  is  obvious  that  a  lesser  number  of  cars  would 
be  needed  to  move  the  total  business.     In  the  move- 
ment of  the  wheat  crop  of  Western  Canada  in  the  year 
1913-14,  the  railways  moved  37.5  milliims  of  bushels 
to  Fort  William  and  Port  Arthur  in  November,  1913, 
while  in  August,  1914,  they  moved  oidy  1.4  million. 
Under  good  weather  conditions  in  October,  191.3,  the 
railways  moved  2.2.3  million  bushels  into  the   Lake 
terminals  in  one  day.     More  could  have  been  handled 
had  it  not  been  for  the  fear  of  congestion  thru  the 
inability  of  the  elevators  and  the  boats  to  take  up  the 
grain  promptly. 

G.  Evils  of  parallel  lines.— As  has  been  indicated, 
attempts  have  been  made  to  trace  an  analogy,  if  not  an 
identity,  between  railway  transportation  and  other 
business.     The  analogy,  however,  is  imperfect.     On 
account  of  the  large  expenditure  of  fixed  capital  neces- 
sary, the  construction  of  parallel  railways  is  expensive 
Normally  it  is  better,  both  from  the  standpoint  of  the 
public  using  the  railway  and  from  the  standpoint  ot 
the  public  investing  in  railways,  not  to  have  redupli- 
cation of  closely  paralleling  railways.     If  there  is  par- 
alleling, the  chances  are  that  there  will  not  be  sut- 
ficient  local  business  for  the  two  lines.     If  the  parallel 
lines  connect  two  important  comn  -rcial  centers,  tlRV 
may  each  obtain  a  sufficient  share  o    the  trade.     But. 
as  regards  local  traffic,  there  may  not  be  enough  ot 


FREIGHT  RATES 


107 


it  to  provide  for  an  adequate  division  of  business. 
I         Two  parallel  railway  systems  competing  for  an  in- 
j       sufficient  local  traffic  have  all  the  greater  reason  to 
1       join  in  some  arrangement  with  reference  to  the  di- 
vision of  the  traffic.     In  the  realignment  of  the  rail- 
way   system    of    eastern    Ontario,    which    has    been 
brought  about  by  the  construction  of  the  Canadian 
Northern  and  the  Canadian  Pacific  lines— the  Camp- 
bellford,  Lake  Ontario  and  Western— there  is  in  the 
towns  along  Lake  Ontario  paralleling  of  the  lines  of 
the  Grand  Trunk  and  reduplication  of  its  facilities. 
These  new  lines  have  been  built  i)rimarily  because  of 
the  thru  business.     As  to  the  local  business,  while 
there  will  be  competition  of  service,  it  is  not  to  be 
expected  that  there  will  be  competition  in  rates,  except 
in  so  far  as  the  short-line  mileage  of  one  railway  will 
control  the  maximum  charges  of  the  other  railways  be- 
I    tween  given  points. 

Even  if  we  have  two  systems  which  do  compete,  the 

\    competition  is  different  from  ordinary  competition. 

I    To  have  competition  operating  in  the  same  way  as  in 

ordinary  business,  there  would  have  to  be  a  very  nar- 

row  extent  of  territory  separating  the  tracks  of  the 

i    competing  railways. 

"f  U,  however,  a  railway  which  has  a  monopoly  of  the 
local  business  charges  exorbitant  rates,  thereby  ob- 
taining profits  greater  than  normal,  it  is  possible  that 
potential  competition  may  redress  them.  I3ut  certain 
qualifications  must  be  borne  in  mind.  The  local  busi- 
ness adequate  for  one  line  might,  even  with  the  addi- 


3" 


108 


INLAND  TUAFFIC 


tional  business  a  second  line  could  develop,  be  inade- 
quate to  give  a  profit  on  the  investment  of  two  lines. 
Then,  again,  if  a  second  line  is  built,  the  capital  once 
invested  must  depend  for  its  return  on  the  conditions 
affecting  its  traffic.  It  cannot,  of  course,  be  moved  if 
the  profits  are  inadequate.  If  a  railway  is  obtaining 
profits  in  excess  of  the  normal  rate,  then,  subject  to 
what  has  been  said,  free  capital  m-'y  in  time  be  at- 
tracted. This  takes  time,  although  it  is  not  im- 
possible. 

REVIEW 

What  form  of  traffic  is  most  profitable  to  Canadian  railways? 

Why? 

Indicate   a   few  of  the   tendencies   in    freight    transportation 

during  the  last  few  years. 

Wherein  lay  the  error  of  Senator  Stanford's  statement  about 

railroads  ? 

How  does  the  railroad  business  differ  from  the  mercantile  and 
manufacturing  business  ? 

Discuss  the  evils  resulting  from  parallel  railway  systems. 


I 


CHAPTER    VII 


THE  BASIS  OF  n.vn:  making 

1.  "Postfif/c  stamp"  rafcs.—Av^u'mfr  f,o,„  the 
nnalo^.y  of  the  poshil  service,  CJalt  in  Ku^huu]  ari.l 
C  cules  ,n  the  Ignited  States  eonlend  that  there  shouhl 
he  a  flat  rate.  Cowles.  in  his  "A  General  I^reiirht 
nnd  Passenger  Post."  lias  put  the  p<,sition  thns: 
Kadway  rates  should  he  determined  hv  the  co.st  and 
"')t  hy  the  value,  of  the  service  rendered.  Any  rate 
that  will  pay  the  cost  ot  the  shortest  haul  of  a  person 
'•»;  of  a  piece  of  property,  within  a  railway  system 
H  .11  pay  the  cost  of  the  average  haul,  and,  theref(,re.' 
the  cost  of  service  rate." 

The  theory  of  Cowles  rests  on  an  exaggeration  of 
liic  unimportance  of  distance.  While  distance  may 
I'ot  m  a  particular  case  be  the  determining  factor  i't 
>s  a  factor  to  be  considered.  He  identifies  the  cost'of 
the  shortest  haul  with  the  cost  of  the  average  haul. 
1  his  IS  a  manifest  misconception  of  the  significance  of 
-lyorages.  Because  the  average  is  made  up  of  a  series 
<•<  journeys,  long  and  short,  of  which  the  shortest  haul 
'•(  terred  to  is  one.  there  is  no  assurance  of  identity 
!>etween  the  uvern^  haul  and  the  shortest  haul.  In 
assim^ng  that  the  rate  will  pay  the  cost  of  service 

"^  109 


no 


INLAND  TRAFFIC 


of  the  shortest  haul  will  he  the  proper  nite  for  all.  he 
is  resting  upon  pure  assuiiiptioii.  If  applieation  ol' 
the  theory  were  made,  it  would  iuevitahly  liappeu  that 
the  long-distauee  trathe  wouhl  l)e  imduly  honused  at 
the  expense  of  the  short-haul  trattie. 

Further,  if  the  rates,  as  Cowles  holds,  are  to  he 
determined  hy  eost  of  serviee  and  at  the  same  time 
distanee  is  to  he  tlisre^arded  by  applying  the  postal 
principle,  it  will  follow  tha  distanee  is  not  a  varying 
element  in  the  eost  of  serviee,  and  that  it  eosts  no 
more  to  haul  a  ear  five  thousand  miles  than  to  haul 
it  five.  While  the  theory  might  possibly  be  enter- 
tained as  a  matter  of  public  policy,  as  a  statement  ot 
a  cost  of  ser\'ice  basis  it  is  a  patent  absurdity. 

2.  Distance   rates.— WhWe   the   "postage   stamp" 
theory  disregards  distance,  the  equal  mileage  theory 
over-emphasizes  it.     In  1873,  there  was  introduced 
into  the  Parliament  of  Canada  a  bill  to  provide  that 
"tolls  should  be  at  all  times  charged  equally  to  all 
persons  and  after  the  same  rate  per  mile  for  all  dis- 
tances in  respect  of  passengers  and  traffic."     At  that 
time,  the  same  subject  was  engaging  the  attention  ol 
the  legislature  of  New  York.     In  both  cases,  it  was 
the  competition  of  goods  from  farther  west,  which 
went  thru  on  a  low-rate  basis  per  mile  as  compared 
with  the  higher-rate  basis  of  the  shorter  haul,  that 
brought  the  matter  to  the  front.     In  Canada,  the  con- 
ditions following  the  panic  of  1873  caused  this  project 
to  be  rather  actively  discussed  in  the  period  from  1873 
to  1875. 


THE  BASIS  OF  RATK  MAKING  m 

III  EriKlaixl,  the  Select  Crninittee  on  Railway 
i'nmimuws  AinalKaiimtion,  1872,  smnnmrized  the  dis- 
advantages as  follows: 

ia.)  It  Moidd  prevent  railways  from  lovverin^r  mtes 
to  meet  sea,  eanal,  or  shr)rter  railway  distance  rates, 
thus  lessenin^r  advantages  of  competition. 

Uk)    It  W(,uld  interfere  with  ^ivin^r  better  rates  on 
ar^er  quantities,  or  on  earryiuK  lon^  distances  at 
I<»uc,  ,  ates.      ( In  respect  of  ciuantitv,  note  the  differ- 
ence in  Canada  l)etween  L.  C.  L.  and  C.  L.     I,,  Enir- 
land,  trainload  (piantities  may  also  he  considered.) 

ic)    Jt  would  compel  the  same  rate  over  expensive 
as  over  less  expensive  lines  of  the  company. 

3.  liafcs  based  on  capitalhution.—Vnkssthcrt  is 
"•  the  first  instance,  a  regulation  of  the  issue  of  the' 
securities  entering  into  the  capitalization,  there  is  no 
assurance  that  the  capitalization  as  it  stands  is,  in  its 
^•it.rety    legitimate.     Then,  again,  a  railway  which 
lias  hecn  lavishly  assisted  by  the  (iovernment;  for  ex- 
ample the  Canadian  Pacific,  may  he  a!,le  to  keep  <lown 
its  capitalization.     Another,  like  the  Grand  Trunk 
I   liiay  have  been  forced  at  times  in  default  of  goyern- 
l   inert  assistance  to  issue  its  stock  at  heavy  discounts. 
:       nder  the  capitalization  plan,  is  the  (irand  Trunk  to 
'H'  penalized  for  its  misfortunes^     Moreover,  if  the 
I  load  with  the  lighter  ca],italization  and  rates  fixed 
I  acrorc hngly  competes  with  the  road  with  the  heavier 
-  capitalization  and  rates  fixed  accordingly,  it  would 
"appen  that  between  common  points  the'latter  road 
^^<'i'id  have  to  meet  the  rates  of  the  former      The 


.«^ 


112 


INLAND  TRAFFIC 


Nissoiijrcr 

.Mile 
K  amines 
tents 

Ton  Mile 

I'.arninps 

Cents 

JM9i 
2.i)(i\ 

0.929 
0.950 

further  question  ari.se.s,  wliat  is  to  be  considered  in 
striking  the  rate  on  capitahzation— is  it  the  par,  or  is 
it  the  cash  whicli  actually  was  raised  ( 

The  t'ollowini^  summary  for  1023  will  serve  to  in- 
dicate the  lack  of  harmony  between  the  takin^rs  per 
passenger  and  per  ton  and  the  capitalization: 


Averajic 
Caj)italizati()ii 
Jx'r.Mile 

Canadian  Pacific    ^KJ.OOl 

Canadian   National    4J,i5(i 


4.  Plufsical  valuation  as  a  rate  />am'.— Correlated 
with  the  question  of  capitalization  as  a  rate  basis  is 
physical  valuation,  which  has  attracted  a  great  deal 
of  attention  in  the  United  States.     Former  Commis- 
sioner Clements,  of  the  Interstate  Commerce  Com- 
mission, m  speaking  before  the  House  Committee, 
j^aid.     "I  think  it  is  .sound  justice  and  law  that,  as  a 
basis  for  constitutional  earnii  gs,  a  fair  return  on  the 
value  of  the  property  means,  generally  speaking,  a 
tail-  return  on  the  investment  actuallv  made,  orig- 
inally and  subsequently." 

5.  Phifsical  valuation  and  its  c feet. -Before  the 
1  bysical  Valuation  Act  of  lOl.-j  was  pas.sed,  the  Rail- 
road Securities  Commis.sion  advocated  that  the  Inter- 
state Commerce  Commission  "be  given  broad  powers 
and  adequate  means  for  valuation  of  the  physical 
property  of  the  railroads  as  one  element  in  determin- 


THK  BASIS  OF  UATK  MAKINC  ,,3 

ing  fair  values  wherever,  in  the  judgment  of  the 
Comnnssmn.  th,s  ,s  of  .  Hji.ict  l:.,„„rt.nee  to  war- 
rant sueh  action."  One  m.v,„„se  „'  the  aet  will  have 
been  aeueve.l  if  the  valu.i.,.,  ,:,,„,,,  „,,ea,iv  secure,! 
are  made  the  basis  for  .leternmunf,  a  level' „f  earn- 
ings wh.eh  will  encourage  railroad  investment 

Ihe  va  nation  of  the  railways  of  the  Unite<l  States 

IfT'".     ;  ''.'■  '?"•  '"'^  '■'"'  *«"-0<").000.  .$.58.000.'- 
000  of  ,W„ch  has  been  borne  '.y  the  railways.     The 
ongmal  field   work  of  valuat.on  carrie<l  on  by  the 
Lnited  States  between  the  period  19i;j  and  1922  his 
.een   completed.      Tentative   valuation   reports   had 
been  made  upon  468  railroad  properties  on  October 
J  ,1923,  embracmg  nearly  .5.5,000  miles  of  road  or 
2.0s  per  cent  of  the  total  „,ile..ge.     Hn.lerlving  re- 
ports had  been  rendered  covering  219.000  nnles.  or 
«8.«-  per  cent  of  the  county's  total  mileage. 

Mr.  I  routy,  who  until  his  death  had  charge  of  the 
»<.rk  on  physical  valuation  which  is  being  ,lone  bv 
l-e  Un,t   ,  states  Governn.ent.  pointed  om  vario,; 
actors  which  must  be  borne  in  mind.'    His  position 
'a.v  be  sm„m„,i,ed.     The  greater  part  of  the  busi- 
ness of  the  railways  of  the  United  States  is  subject  to 
">n,pet,t.ve  conditions  of  one  sort  or  another.  «,  that 
the  rates  of  one  railway  cannot  be  eonsi.lere.l  with- 
""t  regard  to  the  rates  of  other  railways.    Whatever 


l'utV,'l"«.V'''''i'",  " " """'  ""■'■"">.'  ..f  <-i,,„„l, 


'f  Cincuiitrc,    ill' 


L^:i^'^.^ikrM^eaL.^mk^^m 


ti  •■■. 


V  -J^  -^■'1: 


114 


INLAND  TRAFFIC 


charge  is  made  by  one  line  between  New  York  and 
Chicago  must  be  made  by  all,  whatever  charge  is  im- 
posed for  hauling  lumber  to  Chicago  by  one  route 
must  be  the  same  by  all  competing  routes.  Wher 
farmers  have  access  by  wagon  to  two  railways,  the 
rate  to  a  common  destination  on  farm  produce  nmst 
be  the  same.     To  (juote  his  summary: 

The  rate  established  for  one  of  necessity,  influences  and 
frequently  absolutely  determines  the  rate  of  all,  a  fact  which 
must  never  be  forgotten  when  discussing  the  subject.  Now, 
it  is  evident  that  if  the  Commission  should  select  that  road 
most  advantageously  situated,  that  road  whose  business  ix 
the  largest  and  upon  which  the  conditions  of  operation  are 
the  most  favorable  and  should  so  adjust  the  rates  as  to  yield 
a  return  of  six  ])er  cent  upon  its  value,  every  other  road 
standing  in  com}K'tition  with  it  would  receive  less  than  a  six 
per  cent  return  and  some  railroads  might  receive  nothing 
whatever.  The  schedules  under  which  one  carrier  would  earn 
a  fair  return  upon  its  investment  might  not  even  pay  the 
operating  expenses  of  its  competitor.  Upon  the  other  hand, 
if  that  road  laboring  under  the  greatest  disadvantage  wen 
to  be  selected  and  such  rates  establislied  as  would  permit  it 
to  make  a  return  of  six  per  cent  upon  its  investment,  its  com 
petitors  would,  one  and  all,  iw  receiving  an  undue  return 
upon  the  investment. 

Valuation  cannot  determine  the  relation  of  the 
rates  as  between  themselves  because  all  commodities 
cannot  contribute  in  the  same  proportion  to  the  u})- 
keep  of  a  railw^ay  without  seriously  incommoding  the 
movement  of  low-grade  bulky  commodities.  To  sum 
up,  as  was  pointed  out  by  Conunissioner  Clements, 
valuation  will  not  dis])lace  the  necessity  for  the  use 


THE  BASIS  OF  RATE  MAKING 


115 


of  judgment  since  it  will  not  give  a  hard  and  fast 
rule. 

6.  Cost  of  service. — The  theory  which  has  at- 
tracted increasing  attention  as  a  determinant  of  rea- 
sonableness is  that  of  the  cost  of  service.  In  modern 
days,  when  we  find  construction  companies  offering  to 
erect  a  building  for  cost  plus  ten  per  cent,  the  (ques- 
tion is  constantly  asked  why  rates  cannot  be  fixed  ac- 
cordingly. In  business,  the  prices,  whether  for  serv- 
ice or  for  commodities,  must  first  of  all  cover  all  ex- 
penses, and  thereafter  enters  the  item  of  profits. 

Many  railways  have  attempted  to  distinguish  be- 
tween the  expenses  of  passenger  and  of  freight  l)usi- 
ness.  Certain  itenjs  may  be  directly  allocated;  other 
items  which  are  not  enable  of  direct  allocation  are. 
in  the  case  of  the  I.(.  je  and  Xashville  and  the 

Burlington  railways,  d.vided  on  the  basis  of  the  en- 
gine mileage  for  each  class  of  traffic.  While  this  af- 
fords a  system  of  distribution  of  c(  .^t  which  may  be  of 
tomi)arative  value  one  year  with  another,  it  does  not 
show  how  cost  is  actually  distributed,  because  it  is 
based  on  an  assumption  -  ch  may  or  may  not  be 
true. 

The  Interstate  Commerce  Commission  abandoned, 
in  18J)-t,  the  attempt  to  arrive  in  its  accounting  system 
at  cost  of  service.  In  the  matter  of  soft  coal'  rates 
to  the  Lakes,  it  again  considered  cost  distribution. 
However,  the  Commission  has  never  definitely  ac- 


lU) 


INLAND  TRAI TI( 


ceptcil  cost  of  service  as  tlie  infallible  criterion  of 
reas()nal)leness. 

In  railway  service,  there  are  certain  general  ex- 
penses which  must  be  borne  ii"  the  railway  is  to  be  a 
railway  at  all.  These  charges,  in  the  rough,  do  not 
vary  with  the  amount  of  business  done.  Then,  agahi, 
the  railway  does  both  passenger  and  freight  business; 
the  facilities  of  the  railway  are  used  bv  both  these 
types  of  traffic.  The  (luestion  arises:  how  are  the  ex- 
penses ot  creation  and  maintenance  of  these  facilities 
to  be  divided  between  these  forms  of  traihc?  More- 
over, freight  may  be  moving  in  trainloads,  as  in  the 
movement  of  such  a  staple  as  wheat;  or  it  may  be 
handled  in  way-f  r '  ;ht  trains  which  are  peddhng 
package  freight.  The  question  whether  the  move- 
ment is  in  carload  or  in  less-than-carload  quantities, 
as  has  been  indicated,  also  affects  the  cost  of  handling. 
But  the  freight  rate  which  is  struck  must  be  an  inclu- 
sive average.  The  cost  of  the  movement  of  freight 
is  affected  by  the  question  of  whether  it  is  thru  ov 
local.  The  amount  and  direction  of  loaded,  as  com- 
pju'ed  with  empty,  freight-car  mileage  is  also  to  Ic 
considered.  In  Canada  in  1923,  40  per  ceut  of  tlu 
total  freight-car  mileage  re})resented  an  empty  move- 
ment. 

7.  UHiaf  is  cost  of  serviced — \Vhen  we  speak  oi 
cost  of  service  it  must  be  remciiibered  that  it  cover^ 
a  variety  of  meanings.  It  may  be  a  pilnsary  C(  >; 
representing  the  actual  cost  of  movement  either  of  tin 


THE  BASIS  OF  KATK  MAKINti 


117 


article  moving  or  of  an  additional  unit  ol  coininodity 
when  the  tratlie  is  already  moving-.     For  example,  a 
lertairi  amount  of  package  frei<4lit  is  movin^i^-  west- 
ward from  Fort  William  and  tiiere  are  empty  ears 
whieh  have  to  be  taken  westward.     A  railway  may 
eoneeivably  desire  to  attraet  tralHe  at   low  rates  to 
redress  the  volume  of  empty  milea<^c,  since,  as  tlie 
cars  are  moving  anyway,  it  has  only  the  (luestion  of 
tiie  additional  cost.     Every  commodity  must  contri- 
l)ute  in  some  degree  to  secondary  cost.     That  is  to 
say,  it  must  make  such  a  contribution  to  all  the  ex- 
penses of  the  road  plus  some  return  of  prolit  which  will 
enable  the  railway,  one  counnodity  w  ith  a  lother,  to 
be  continued  in  an  efficient  condition.     This  is  the 
most  difficult  phase  of  the  cost  of  service  theory, 
for    what    the    commodity    can    contribute    to    this 
secondary,  but  none  the  less  necessary,  cost,  depends 
«)n  its  ability  to  contribute,  not  on  any  i)reconceived 
idea  of  what  it  ought  to  contribute. 

An  important  (juestion  as  affecting  any  attempts  to 
determine  cost  of  service  is  the  ratio  of  constant  to 
variable  expenses.  Adopting  the  method  of  analysis 
used  by  W.  Z.  Ripley,^  the  following  summary  analy- 
sis of  one  year's  total  expenditures  of  the  railways 
of  Canada  may  be  made  for  illustration:  - 

'  "Kailroad   Hates  and   Refrulations,"  ji.    Vi,  by  W.  Z.  Ripley. 

•  Ai!  amended  classification  adopted  in  tiie  statistical  reports  of  the 
Department  of  H.'iiiways  and  Canals  In  later  veir-  pivents  the  .'.nn!'. - 
si>  iKMug  brought  down  to  date. 


118 


INLAND  TRAFFIC 


ANALYSIS  OF  TOTAL  KXFKXDITLRES.CANADLVN 


RAILWAYS 

I'tT  (flit 

of 

Per  cent 

of 

Opt-ratiiiji  Kx 

|)»'nscs 

Total  Kxpfiiscs 

Both 

Constant 

N'ariable 

Both 

Constant 

\ 

ariaMe 

Maintenance  of  w 

ay 

;in<l    struct II ri's. 

ii).47 

i:j.o-' 

(j.4j 

17,;i 

11. 1 

0.9 

Maintciiiinio  of 

*-(](ii|)iiiciit    .... 

19.0(> 

9.53 

9.jJ 

1G.8 

H.l 

HA 

Trattic    fxpt-nsfs. 

:}.9e 

liA 

'J'ransportatiori    .  . 

,V.'.79 

.'H.:575 

iH.37j 

4().5 

2iMj 

J4.9.> 

(i»MH'ral  »'X|)eiise.s. 

4. 7  J 

A.72 

4.2 

4.,' 

.    .    •   ■ 

Fixt'il    (ha  1  {it s. . . . 





1L8 

ll.H 



lUO 


5.()45 


4l.:J.iJ 


100 


00.73 


39.-'j 


Summarizing'  these  computations,  we  arrive  at  the 
result  that  approximately  three-fifths  of  the  total  ex- 
penditures of  the  Canadian  railways  and  .>.")  per  cent 
of  their  operating  expenses  are  independent  of  the 
changes  in  the  volume  of  trattic.  Two-fifths  of  the 
total  expenses  and  45  per  cent  of  the  operating  ex- 
penses vary  with  changes  in  the  traffic. 

The  Wisconsin  Commission,  whose  work  in  connec- 
tion with  the  regulation  of  rates  as  been  extremely 
valuable,  has  placed  great  reliance  upon  the  cost  of 
service  principle.  Commissioner  Erickson  said: 
"The  cost  of  service  both  in  law  and  in  fact  appears 
to  be  the  fundamental  basis  for  rates."  But  tlie 
judgments  of  the  Commission  show  that  it  is  an 
a\erage  cost  of  .service,  modified  by  what  the  traffic 
will  bear,  which  the  Commission  is  attempting  to  ap- 
ply.    It  ruled  in  one  of  its  decisions: 


Tlie  cost  of  transportation  to  the  carriers  consists  of  tlu' 
operating  exj)enses  including  reasonable  returns  on  their  in- 


THE  BASIS  OF  RATE  MAKING  119 


M 


U 


v»-.stment.  This  cost,  wIr-h  inodiHtd  hv  wimt  tin-  traffic  can 
fairly  In-ar  in  the  way  of  transportation  charges  constitutes 
the  inai.i  basis  for  rate  making.  In  distrihutnig  these  costs 
upon  the  units  of  transportation,  it  is  necessary  to  take  into 
account  the  resj)ective  proportions  of  tlie  terminal  and  move- 
ment expenses,  the  qu  litity  transported,  the  vahie,  rehitive 
weight  and  risks  involved  tor  each  of  the  various  classes  of 
freight,  Ihe  loading  per  car,  the  gross  tonnage  of  both  |)av 
and  dead  weight  the  difference  in  cost  as  between  local  and 
thru  trains  and  many  other  elvments  of  this  nature.  It  is 
obvious  that  in  calculations  into  which  so  many  factors  enter, 
as  ui  the  case  here,  only  approximately  correct  rescdts  can' 
be  obtained. 

8.  Factor  of  value  in  cost  of  ,scrvicc.~T\w  iiiipor- 
tance  of  value  as  a  factor  was  emphasized  in  a  paper 
read  by  Connnissiouer  Krieksori  before  the  National 
Assoeiation  of  Railway  Commissioners,  a  niimher  of 
vears  ago,  in  which  he  saiil: 

...  costs  .  .  .  (are)  the  first  and  most  essential  element 
in  rate-making.  But  .  .  .  recognition  of  value  in  fixing 
rates  is  usually  regarded  as  in  line  with  the  best  interests  of 
all  consumers  .  .  .  cheap  and  bulky  articles  are  as  a  rule, 
not  moved  at  all  except  at  comparatively  low  rates,  and  this 
for  the  reason  that  their  ability  to  pay  is  small.  .  .  .  While 
low-priced  articles  should  be  charged  comparatively  low 
rates,  the  rates  so  levied  upon  them,  under  normal  conditions, 
shoidd,  as  a  rule,  be  high  enough  to  cover  their  share  of  the 
ordinary  operating  ex,)enses  including  something  in  the  wav 
ot  net  earnings.  Such  traffic  is  of  importance  even  on  these 
terms.  It  increases  the  volume  of  the  traffic  and  therebv  de- 
creases the  cost  of  the  same  per  unit.  By  contributing 
something  to  net  earnings  it  also  decreases  the  amount  that 
will  have  to  be  borne  by  the  rest  of  the  traffic.  The  de- 
ficiencies in  the  net  earnings  from  low-grade  traffic  should  be 
made  up  by  higher  rates  on  the  higher  grade  traffic. 


I 


120 


INLAND  TRAFFIC 


'    i 


Used  in  this  way  cost  of  service  determines  not  the 
actual  reasonable  rate  to  be  ciiar««'ed  hut  the  niiniimiin 
average  necessary  rate. 

9.  ^lUocation  of  railxeay  costs. — The  matter  ol*  cost 
analysis  is  one  whicli  involves  nianv  technical  consid- 
erations  and  in  which,  so  far,  it  cannot  he  said  that 
there  is  a  consensus  of  opinion  as  to  method.  If  a 
<^eneral  scale  of  rates  is  hein^  considered,  it  is  neces- 
sary, in  the  first  instance,  to  subdivide  ex])enses  be- 
tween frei<»ht  and  passenger  business,  and  the  first 
(juestion  then  is  to  ascertain  what  expenses  may  froni 
their  nature  be  allocated  directly  to  a  particular  serv- 
ice. Over  and  alune  these  are  certain  costs,  e.  g.. 
those  of  maintenance  of  way  and  structure.  How 
are  these  to  be  allocated?  They  are  expenses  which 
must  be  incurred  if  the  railway  is  to  operate  at  all. 
In  fact,  they  are  common  expenses  necessary  to  and 
influenced  by  the  necessities  of  both  services,  but  not 
wholly  controlled  bv  either.  The  methods  utilized 
in  such  ^  ibdivision  are  interesting  hut  too  technical 
to  be  examined  within  the  limits  availal)le. 

10.  Costs  are  average,  not  sj)eci/ic. — The  costs,  no 
matter  how  worked  out,  are  average,  not  specific 
costs.  The  judgment  of  the  Board  in  the  Western 
Kates  Case,  in  dealing  with  the  cost  methods  used  by 
Mr.  ^liiller  who  gave  expert  evidence,  was  as  fol- 
lows : 

The  matter  was  presented  to  the  Board  in  a  very  conipli 
cated  manner,  and  the  cross-examination  of  the  witness  and 
the  results  can  be  also  so  described.     Mr.  Miiller  himself  de- 


THi:  BASIS  OF  HATi:  MAKING 


IH\ 


»cril)e.s  the  sitimtion  in  this  way,  on  hrin^'  a>ko(l  us  to  what 
ui'N  uii-ant  by  tlio  statiincnt  tliat  thi'  tii^uivs  were  avcra^f 
h^jrcs.  "Tiu'}'  are  not  specitii-  costs  ivlatin^  to  a  spt-c-iUf 
iiiovenient  or  a  spt-citii-  coinniodit v,  in  anv  siiim'.  I  think  it 
is  pri'ttv  well  ret'o;;ni/e{i  that  it  is  practicallv  an  iinpossihilit v 
ill  transj)ortation  work  to  aseertain  specihe  eost  for  iiandlin^ 
aiiv  specific  service,  due  to  the  tact  that  tlie  transportation 
service  is  composed  of  niuitifar.'ous  and  exceedin^lv  numerous 
individual  items  and  services  far  more  diverse  than  usuailv 
is  the  case  in  most  manufacturing  and  mercantile  establish- 
ments where  costs  are  used.  So  that  the  only  basis  which 
can  be  developed  at  this  present  timi — at  least  with  such  sta- 
tistics as  are  available — is  an  average  basis  in  wliich  all  the 
various  kinds  and  characters  of  freight  service  are  'nixed  and 
levelled."   .   .    . 

It  goes  on  to  show  that  tlie  iKJ  primary  accounts, 
as  contained  in  the  railway  returns,  are  apportioned 
by  Mr.  ]MiilIer  in  terms  of  nine  different  hases. 

il.  What  the  traffic  tiill  hcar.~The  Cullom  Com- 
mittee, whose  report  was  responsil)le  for  the  constitu- 
tion of  the  Interstate  Commission,  said:  "The  capac- 
ity of  each  commodity  t)  contribute  to  tlie  payment 
>f  the  fixed  charges  is  measured  by  the  extent  to 
Nvhicli  the  cost  of  its  transportation  fixes  its  market 
value  and  determines  the  (juestion  of  its  movement." 
The  late  Commissioner  T^ane.  who  during  his  tenure 
of  office  as  a  member  of  the  Interstate  Commerce 
Commission  was  a  most  trenchant  critic  of  railway 
evils,  said: 


*-'  ■■'<  fc.-^ 


.  .  .  consideration  must  be  given  to  what  may  be  termed 
]>ublic  policv,  the  advantage  to  the  communitv  of  haviiiir  some 
kinds  ot  freight  carried  at  a  lesser  rate  than  other  kinds,  and 


1 

I 


122 


INLAND  TRAFFIC 


this  is  the  true  nienniii^  of  thr  plirasi-,  "What  the  traffic  will 
bear."  It  expresses  the  eoiisidtiiitioii  that  must  be  shown  bv 
the  traffic  manager  to  the  need  of  the  people  tor  certain  com- 
modities. He  accordingly  imposes  a  higher  rate  upon  what 
may  be  termed  luxuries  as  comjjared  with  that  iuiposed  upon 
those  articles  for  which  there  is  more  universal  demaiid.'   .   .   . 

Albert  Fink,  who  was  the  first  railway  otfieial  in  the 
l.'^iiited  States  to  attempt  to  make  a  seientifie  study  of 
traffic,  believed  that: 

1  ne  (juestion  that  greatly  controls  tariff's  is  uluit  is  the 
.service  zcortli  not  iclKit  does  it  cost;  and  this  is  a  mere  com- 
mercial transaction  uncontrollable  by  acts  of  legislation. 
The  relative  value  of  an  article  at  tht  place  from  and  to 
which  it  is  shipped  dele  n  'nes  the  charges  for  transportation 
it  can  l)ear.  If  a  greaier  charge  is  made  than  the  difference 
in  these  values,  the  article  cannot  be  moved.  It  may,  there- 
fore, be  found  necessary  to  charge  on  some  articles  less  than 
the  full  cost  of  transportation,  in  order  to  enable  them  to  be 
niovtd  at  all,  and  this  necessitates  again  to  charge  more  on 
others  which  can  bear  higher  charges. 

Is  the  principle  which  the  foregoing  quotations  set 
out  limited  to  railway  business  alone? 

12.  Other  applications  of  this  principle. — The 
princij)le  of  "what  the  traffic  will  bear"  has  been  a})- 
j)lied  in  other  forms  of  business  besides  transporta- 
tion. In  a  certain  Canadian  department  store,  it  is 
the  rule  to  have  every  commodity  sold  within  six 
months,  altho  the  turnover  of  most  commodities  is 
much  more  frequent  in  the  six  months'  period.  ^V 
picture,  for  example,  that  can  not  be  sold  at  the  price 

1  9.-2  I.  C.  C,  «-'3. 


JZ^ 


TllK    HASLS    OF    HATK    MAKINXJ 


12.i 


originally  iiiarkfci  will  ho  reduced  until  it  is  (lisi)()se<l 
of  within  that  period,  even  tho  it  thus  nets  hut  a  slight 
profit  or  is  sold  at  cost.  Other  eonitnodities  sold 
may  contrihute  in  greater  degree  to  fixed  charges  and 
to  profits.  In  the  last  analysis,  all  the  eonwnodities 
will  he  sold  at  such  prices  as  will  meet  not  only  the 
charges  special  to  them,  hut  overhead  charges  as  well, 
phis  some  contrihution  to  profits.  What  each  com- 
modity will  pay  to  overhead  charges  and  profits  will 
depend  on  the  price  at  which  it  can  he  sold— in  other 
words,  on  tlie  ahility  to  pay. 

A  Canadian  residing  in  California  found  that  the 
price  of  his  home  paper,  per  year,  was  less  west  of  the 
Mississippi  River  than  in  Canada.  This  difference  in 
cost  was  explained  hy  the  fact  that  the  return  from 
suhscriptions  wost  of  the  Mississippi  River  was  re- 
gan'-i  us  akin  to  a  hy-product.  To  the  extent  that 
this  reiarn  contrihuted  something  over  and  ahove  ac- 
tual cost  to  general  expenses,  it  was  aiding  in  holding 
down  the  price  of  the  paper  in  Canada.  The  only 
conclusion  that  can  he  arrived  at,  having  in  mind  the 
different  services  rendered  in  the  two  sections,  is  that 
the  lower  charge  was  all  the  traffic  would  hear. 

la.  Practical  mcamng  of  the  /rrw.— There  is  no 
(luestion  hut  that  if  the  railway  rate  is  so  fixed  as  to 
take  up  that  difference  hetween  the  price  at  the  place 
of  original  shipment  and  the  price  at  destination— the 
^'ull  inea:,ure  of  the  .alue  of  the  service— this  is  ex- 
tortion. But  the  term  "what  the  traffic  will  hear"  is 
concerned  with  something  within  this  outside  limit. 


TTT-. 


J.  ^j , 


124- 


INLAND  TIlAFFir 


It  is  concerned  not  with  "all  the  tratHc  can  hear,"  Imt 
wliat  it  can  hear  and  at  the  same  time  atl'ord  a  mutual 

proHt. 

Ket'erencc  is  sometimes  made  to  the  fact  that  many 
articles  ol'  li^dit  wei<»ht  and  hi^h  values  could  stand 
very  much  hi«^hcr  rates  than  at  present,  without  seri- 
ously afVecting-  the  consumer.     To  say,  for  example, 
that  an  increase  of  10  per  cent  in  the  rates  on  furni- 
ture mii^ht  add  sixteen  cents  to  the  cost  of  a  dinin^- 
voom  set;  that  an  ordinary  suit  of  clothini.^  mioht  i)e 
increased  from  a  third  to  half  a  ce?it  hv  a  10  ]icr  cent 
increase  in  freight  charoes;  and  that  hy  a  similar  in- 
crease the  cost  of  slioes  nnuht  be  increased  one  cont 
])er  pair,  is  really  to  hec?  the  question,  hecmse  the 
])()int  is  not  that  the  article  in  question  could  stand  a 
very  nnich  hiuher  rate  without  ai)precid»ly  affecti'iu 
the  consumer,   hut.  Mhefher  the  rate   Is   reasonable. 
As  has  been  aptly  said,  "Stateme!its  like  these  .  .  . 
em])hasize  the  economy  of  the  transportation  ser\  ice: 
but  they  also  show  with  e<iual  clearness  that  if  the 
carrier  is  not  prevented  by  competition  or  by  goverii- 
inent  interference,  he  may  exact  such  rates  of  i)r()- 
ducers  as  would  compel  them  to  i):iy  much  o;reater 
sums  to  the  carrier  than  he  is  entitled  to  receive." 

Char^in.i^  what  tlie  traffic  will  bear  has,  with  recog- 
nition of  its  proper  limitations,  proper  justiHcation. 
While  the  transportation  charge  is  not  properly  a  tax. 
since  it  is  a  payment  for  a  specific  service,  and  uiiile  in 
the  ease  of  taxation  it  is  difficult,  if  not  impossible,  t 
designate  the  particular  benefit  received,  the  trans- 


(> 


U  € 


Mi^ 


TIIK    HASIS    OF    HATi:    .MAKI>  G 


IJ.-) 


^ 


:.f 


portation  charge  hoars  an  analogy  to  the  hasis  of  taxa- 
tion, naiiitly,  ahihty  to  pay.  rroperly  appHid. 
char^iii^  what  the  traflic  will  hear  means  so  appor- 
tioni!)^  the  ehar^es  as  to  allow  the  widest  possihle 
iiiovenient  of  all  eomniodities.  Certain  ehar^es.  as 
has  heen  shown,  do  not  vary  with  the  tralHe.  Xo 
artiele  shonid  he  handled  at  less  than  the  out-of-poeket 
charges  for  its  movement.  Bnt  what  shall  it  eontrihute 
to  the  general  expenses^  As  the  Wiseonsin  Commis- 
sion points  out,  there  nuist  he  eonsidered  the  value 
and  nature  of  the  artiele  as  well.  If  iee.  lime  or  stone 
cannot  eontrihute  mueh  over  and  ahove  the  out-of- 
jMK'ket  expenses  to  eonstant  expenses,  some  other 
commodity  must  hear  more. 

Some  years  a^ro,  a  railway  official  stated  that  rates 
were  hased  on  competition,  comparison  and  compro- 
mise. That  is  to  say,  rates  are  wholly  empirical.  While 
this  may  he  too  hroad  a  treneralization,  the  experience 
i>f  Germany  is  to  the  point.  There,  on  the  ^ove'-iunent 
owned  and  operated  railways,  they  had  at  first  a 
'space"  tariff'  under  which  each  commodity  pnid  an 
equal  rate  per  kilometer  hased  on  the  space  oecupiedhy 
It  in  the  car,  plus  a  fixed  terminal  char«re.  Now  there 
IS  in  operation  a  tapering  rate.  The  rate  per  kilo- 
meter decreases  as  the  distance  increases,  and  it  is 
also  modified  in  j)articular  cases  hy  competition.  The 
Government  has  had  to  consider  the  ahility  of  com- 
modities to  pay.  In  the  export  rates  of  the  German 
railways  to  the  seaports  the  same  recognition  of  com- 
petition is  to  be  found,  both  in  respect  to  water  and 

XV  c— 10 


^agfa; 


mi 


I 


126 


INLAND    TRAFFIC 


market  competition.  For  example,  before  the  late 
war,  to  meet  the  competition  of  British  manufac- 
tured goods  at  the  seaports,  similar  German  goods 
were  carried  by  rail  to  these  ports  at  much  lower  rates 
than  were  charged  on  local  rail  movement. 

14.  Fiew  of  Canadian  Manufacturers'  Association. 
— The  organ  of  the  Canadian  Manufacturers'  Asso- 
ciation, Industrial  Canada,  in  dealing  with  the  sub- 
ject from  the  shippers'  standpoint,  stated  the  situa- 
tion as  follows : 

Criticism  of  the  railways  and  their  methods  of  rate  making 
should  be  tempered  by  a  consideration  of  some  of  the  prob 
lems  they  have  to  meet.     In  theory,  no  doubt,  a  carrier 
should  charge  the  same  rate  for  the  same  service  under  all 
conditions.     Practically,   such    a   thing    is   impossible.     In 
order  that  the  factories  of  Ontario  may  operate,  it  is  neces 
sary  that  coal  be  carried  from  Pennsylvania.     It  must  be  do 
livered  for  a  few  dollars  a  ton ;  it  costs  so  much  at  the  mint 
mouth;   the   rest   goes   for   transportation.     If   more   wer< 
charged  the  factory  could  not  buy  it  and  the  business  devel 
oped  by  that  factory  would  cease.     For  that  reason,  rail- 
ways are  hauling  coal  at  a  price  which  in  itself  would  not 
pay  the  cost  of  operation.     They  do  it  in  order  that  busines- 
in  their  territory  may  be  developed.     The  man  who  estab- 
lishes a  smelting  plant  in  Ontario  must  be  able  to  manufac 
ture  pig  iron   at   a   cost   which   will   enable   iiim   to   sell   in 
competition  with  his  competitors  in  Pittsburgh,  Sydney  or 
any  other  point.     With  fixed  charges  established   and   tin 
cost  of  ore  and  coal  at  the  mine  mouth  uniform,  he  is  able  to 
pay  only  so  much  for  transporting  that  ore  and  coal.     That 
is  all  the  traffic  will  bear.     It  rests  then  with  the  railway  t=i 
sav  whether,  for  the  sake  of  the  business  such  a  plant  will 
bring  into  existence  and  to  keep  rolling  stock  moving  or  tn 
provide  return  cargoes,  this  traffic  is  worth  while  at  such  a 


THE    BASIS    OF    RATE    MAKING 


127 


i 


)le,  that  of  cli 


•Imt  th 


rtic 


price.  But  the  principle,  that  or  cimrging  wimt  the  triimc 
will  bear,  is  sound  and  is  indeed  the  only  system  which  is  at 
all  practicable.  Tiie  idea  that  other  industries  haye  to  pay 
extra  to  make  up  for  their  low  rates  on  raw  materials  is 
absurd.  The  business  has  to  be  taken  ai  a  low  price  or  not 
at  all.  By  taking  it  fixed  charges  arc  distributed  owv  a 
wider  bulk  of  business  and  conditions  are  to  that  extent  im- 
proved for  other  users  of  the  service.  It  jjrobably  costs  a 
railway  as  much  to  handle  a  ton  of  coal  as  a  ton  of  silk. 
If  the  rates  were  averaged  the  buyer  of  a  piece  of  silk  might 
benefit  to  the  extent  of  a  cent  or  two,  while  the  householder 
would  find  his  coal  bill  go  up  some  dollars  a  ton.  The  sug- 
gestion would  be  no  more  popular  tlian  feasible.  As  the 
present  system  is  the  only  one  which  practical  railway  men 
have  so  far  been  able  to  devise  and  as  it  has  been  a|)|)roved 
by  shippers  as  right  in  principle,  tlio  frecjuently,  it  is  true, 
somewhat  unsatisfactory  in  its  individual  incidences,  we  may 
be  allowed  to  accept  what  we  have  rather  than  ...  to  fly  to 
evils  that  we  know  not  of. 

15.  Determining  the  reasonableness  of  a  rate. — Jn 
;i  case  coming  before  the  Public  Utilities  Coniinis- 
bion  of  Maine,  ^Ir.  C.  H.  Tiffany,  Traffic  Manager 
f)f  the  pulp  companies  concerned,  used  the  following 
language : 

.  .  .  the  making  of  freight  rates  is  not  an  exact  seience, 
because  it  is  impossible  to  determine  witii  exactness  ju-t  what 
portion  of  the  investment  costs  nnd  oj)erating  expenses 
>b()uld  be  charged  to  any  particular  commodity  out  of  the 
tliousands  carried  on  our  railroads.  The  .iifficulty  of  the 
problem  is  shown  by  the  different  theories  of  able  men  as  to 
Hie  proper  way  to  allocate  costs  and  expenses  even  between 
tlio  freicrht  ai 


I 


lass 


inrer  bii 


smosNC. 


\s  a  ])ractical  mattt  r 


what  the  carriers  and  connnissions  must  do.  in  order  to  de 
termine  the  reasonableness  of  a  rate,  is  to  find  out  I 


low  much 


revenue  is  necessary  to  i)av  oT)erati 


ing  expenses  and  permit 


US 


INLAND  TRAFFIC 


a  proper  return  for  depreciation  and  interest  on  the  invest- 
ment ;  apportion  tliat  amount  between  tlie  passenger  and 
freiglit  business  as  scientitieally  as  they  may;  and  tlien  ap- 
portion the  freight  revenue  amongst  the  ditt'erent  commod- 
ities carried  considering  a  number  of  ditt'erent  factors. 

Thus  from  the  very  beginning  the  question  of  the  reason- 
ableness of  a  particular  freight  rate  has  been  determined, 
not  by  finding  the  value  of  the  investment  apportioned  to 
and  the  cost  of  carrying  that  particular  commodity,  but  by 
comparing  the  characteristics  of  its  carriage  with  the  char- 
acteristics of  the  carriage  of  other  commodities.  Generally 
speaking,  the  rate  for  a  long  haul  is  relatively  lower  than 
for  a  short  haul;  a  rate  for  a  valuable  article  or  one  easily 
damaged  is  relatively  higher  than  one  for  a  cheap  article 
or  that  is  hard  to  damage;  perishable  freight  which  must 
be  carried  without  delay  should  j)ay  a  higher  relative  rate 
than  freight  which  is  not  damaged  by  delay.  Articles  that 
load  heavily  and  compactly  are  entitlod  to  lower  rates  than 
those  which  are  light  and  do  not  load  the  car  to  capacitv- 
Commodities  carried  in  large  quantities  should  have  lower 
rates  than  those  in  which  traffic  is  not  so  dense.  In  general, 
manufactured  articles  should  pay  higher  rates  than  raw 
materials. 

16.  Xo  one  factor  determines  reasonableness. — 
What,  then,  is  the  test  of  reasonableness?  Distance, 
bulk,  conditions  of  loading,  value,  cofiipetition,  cost 
of  service — these  and  other  factors  all  have  weight. 
Kut  no  one  factor  can  be  pointed  to  as  exclusively 
applicable  in  every  case.  There  is  no  yardstick  of 
reasonableness.  While  there  are  factors  capable  of 
more  or  less  precise  determination  which  bear  upon 
the  question  of  reasonaideness,  the  final  answer  of  a 
regulative  tribunal  must  be  that  the  reasonableness 
of  a  rate  is  a  matter  of  judgment. 


THE  BASIS  OF  RATE  MAKING 


129 


REVIEW 

What  is  the  diiference  between  the  postage  stamp  rate  and  the 
equal  mileage  tlieory? 

Discuss  pnysical  valuation  as  a  basis  of  rate  making. 

What  do  you  understand  by  '' ••-  cost  of  service  theory  of 
making  rates?  How  would  y  a,  '^ly  it?  How  lias  it  been 
made  to  apply  by  the  Wisconsin  nission? 

Explain  what  you  believe  the  p..  '  "what  the  traffic  will 
bear"  means.  Can  this  principle  be  applied  in  your  business? 
Discuss. 

How  did  the  Canadian  Manufacturers*  Association  regard  the 
question  of  rate  making  by  the  railroads? 

W^hat  is  the  test  of  the  reasonableness  of  a  rate  ? 


*  ■>  J- 


C IIAPTER  VIII 


FREIGHT  RATES  IX  PRACTICE 


rv*| 


1.  Class  tariffs  and  commodity  tariffs. — By  refer- 
ence to  the  classificjition  it  niav  be  ascertained  in  which 
class  the  article  (for  example,  cotton  piece  goods), 
which  the  shipper  desires  to  send,  is  to  be  found.  By 
referent  e  to  the  appropriate  tariff,  the  rate  for  the 
article  \\\\\  be  secured. 

Tariffs  niav  name  rates  either  in  classes  or  bv  com- 
modities.  When  they  name  rates  on  specific  com- 
modities, these  commodities  are  taken  out  of  the  or- 
dinary classification  rating.  In  C^anada  and  the 
I'^nited  States,  tariffs  quoting  rates  on  commodities 
are  known  as  commodity  tariffs.  In  P^ngland  and 
Germany,  they  are  known  as  exceptional  rates. 
Commodity  tariffs  are  concerned  with  the  lower  grade 
goods. 

In  a  commodity  tariff,  the  normal  unit  is  the  car- 
load. A  commodity  rate  is,  in  general,  a  recognition 
of  the  volume  of  movement.  It  may  be  given  with  the 
intention  of  developing  an  industry,  or  as  a  recogni- 
tion of  a  large  tonnage  from  a  staple  industry — for 
example,  the  movement  of  grain  or  live  stock  in  Can- 
ada. When  there  are  different  classifications  in  a 
country,  as  in  the  United  States,  a  commodity  may 

130 


FREIGHT  RATES  IN  PRACTICE 


131 


be  given  different  ratings  in  different  territories;  for 
example,  in  the  Southern  Classification,  raw  cotton, 
a  staple  commodity,  has  a  commodity  rating,  while 
under  the  Western  and  Official  Classifications  it  has 
a  class  rating.  Again,  the  voluuie  of  movement  of 
iron  ore  in  the  northern  states  leads  to  the  establish- 
ment of  a  commodity  rate.  A  commoditv  rate  mav 
be  given  as  a  result  of  water  competition,  as  in  the  case 
of  traffic  destined  for  the  Pacific  Coast. 

In  Germany,  the  reasons  given  for  granting  such 
rates  will  outline  the  extent  of  the  practice.  The  rea- 
sons summarized  are;  railway  competition,  competi- 
tion against  waterways  and  highways,  competition 
against  foreign  transportation  ways,  competition  to 
divert  traffic  to  a  given  harboi-,  competition  of 
markets,  rates  granted  to  develop  industries  which 
have  unfavorable  geographical  situation,  rates 
granted  to  insure  the  continuity  and  increase  of 
transportation.  For  England,  tlic  granting  of  sucli 
rates  has  been  justified  by  the  foregoing  considera- 
tions and,  in  addition,  by  volume  and  regularity  of 
traffic,  loading  per  car  or  per  train,  earning  power  of 
traffic,  liability  or  non-liability  to  damage  and  general 
considerations  of  what  the  traffic  will  bear. 

As  indicative  of  the  nature  of  the  commodities  on 
which  such  rates  are  granted,  the  following  list  of  the 
principal  articles  on  which  carload  commoditv  rates 
are  published  in  Canada  mav  be  referred  to: 


Canned    goods,    lumber    and    shingles    and    rough    forest 


13a 


INLAND  TRAFFIC 


products  generally,  salt,  coal  and  coke,  ores,  grain  and  grain 
products,  cement,  hides  and  skins,  packing-liouse  products, 
iron  and  steel  articles  (coarse),  building  material  (brick, 
stone,  sand,  lime,  etc.),  paper,  wood-pulj),  petroleum  and  its 
products,  fertilizeis,  sugar  and  molasses,  starch  and  glucose, 
ice,  sugar  beets,  coo])erage  stock,  })otatoes,  turni])s,  onions, 
flaxseed  and  meal. 

As  an  example  of  the  method  pursued  in  building 
up  a  particular  commodity  tariff,  reference  may  be 
made  to  the  C.  P.  R.'s  special  coke  and  coal  tariff,  C. 
H.  C,  No.  W1296,  effective  October  4,  1909.  This 
tariff,  which  applied  in  Western  Canada,  took  coal 
out  of  the  1 0th  class,  to  which  it  belongs,  and  worked 
out  the  following  basis,  the  rate  taperhig  as  the 
distance  increases : 

100  miles  and  less 66%  of  10th  class 

J^OO  miles  and  less 6-t%  of  10th  class 

300  miles  and  less 63%  of  10th  class 

400  miles  and  less 6^2%  of  10th  class 

500  miles  and  less 61%  of  10th  class 

600  miles  and  less 60%  of  10th  class 

700  miles  and  less od%  of  10th  class 

800  miles  and  less 5iy/r  of  10th  class 

1000  miles  and  less 51%  of  10th  class 

Class  rates  apply  to  movements  either  way.  The\ 
carry  the  notation  that  thev  are  effective  "between"' 
stations.  A  commodity  rate  is  specific  and  applies  to 
a  movement  in  one  direction,  unless  otherwise  noted. 
For  example,  the  Canadian  Pacific  tariff  on  grain, 
flaxseed  and  grain  products  from  stations  in  ]Mani- 
toba,  Saskatchewan  and  xVlberta  to  Westport,  Fort 


FREIGHT  RATES  IN  rHACTICE  133 

William  and  Port  Arthur  is  limited  to  the  movement 
in  one  direction  and  to  specific  points. 

Commodity  rates  are  extensively  used.  In  Canada, 
al  least  75  per  cent  of  the  railwav  tonnage  is  carried' 
on  commodity  rates.  In  the  United  States,  prohablv 
a  larger  percentage  of  the  business  is  so  transacted. 
In  Canada,  90  per  cent  of  the  commodity  rates  are  on 
articles  rated  below  third  class,  i.  e.,  on  the  bulkier  ar- 
ticles moving  in  large  volume.  In  the  transcontinen- 
tal business  to  the  Pacific  Coast,  into  which  water  com- 
petition enters  as  an  important  competing  and  regu- 
lative factor,  all  the  rates  may  be  regarded  as  com- 
modity rates.  In  England,  the  commodity  rates 
cover  about  75  per  cent  of  the  business;  in  Germany, 
about  63  per  cent. 

2.  Comparisons  of  freight  traffic— Comparison  be- 
tween the  freight  rates  of  Canada  and  the  United 
States  on  the  one  hand,  and  the  freight  rates  of  Eng- 
land and  Germany  on  the  other  hand,  are  often  made 
with  a  view  of  showing  how  low  we  the  rates  of  the 
New  Wo'ld.  Before  making  comparisons  one  must 
be  sure  that  there  is  a  common  denominator. 

While  in  Canada  and  in  the  United  States  the  in- 
crease in  the  number  of  carload  ratings  and  the  in- 
c'lease  in  the  size  of  the  cars  has  had  its  effect  in  the 
increase  of  the  average  tonnage  per  car,  commercial 
'onditions  differ  in  England  and  in  Germany.  In 
!'oth  Canada  and  in  the  Ignited  States  the  ^O-ton 
tar  may  be  taken  as  normal.  In  England,  the 
10-ton  car  and  in  Germany,  the  20-ton  car  are  the 


134 


INLAND  TRAFFIC 


I' 


normal  cars.  The  Canadian  Pacific  in  moving  grain 
to  the  head  of  the  Lakes,  in  trainloads,  can  average 
33.75  tons  per  car.  In  Enghuid,  the  average  consign- 
ment of  grain  is  about  two  tons.  In  England,  an  av- 
erage of  the  business  in  general  merchandise  from  a 
representative  station  of  the  Great  Northern  for  one 
day  showed  4,427  packages,  wliich  had  a  total  weiglit 
of  123  tons.  The  verage  weight  per  consignment 
was  two  cwt.,  the  average  weight  per  package  was  62 
lbs.  The  total  number  of  cars  required  to  move  this 
business  was  72,  while  the  average  load  per  car  wj:  -  34 
cwt.  Under  the  most  favorable  circumstances,  the 
average  loading  of  merchandise  per  car  on  the  London 
and  North  Western  does  not  exceed  three  tons. 

In  England,  small  cars  with  small  shipments  and 
greater  dispatch  are  used.  Some  years  ago  an  officer 
of  the  Caledonian  Railway,  in  comparing  the  rates 
of  the  quantities  moving  normally  on  his  railway  with 
those  of  New  York  and  Philadelphia,  found  that  for 
distances  of  forty  or  fifty  miles,  the  rates  on  groceries, 
dry -goods  and  tea  on  his  railway  were  lower. 

In  Canada  and  the  United  States,  the  ton-mile  rate, 
a  work-distance  rate,  built  up  by  multiplying  weight 
by  distance,  affords  a  statistical  measure  of  earnings. 
Ton-mile  rates  are  kept  in  England  by  the  Nortli 
Eastern  Railway,  and  comparison  may  be  made  with 
the  German  railways.  But  in  England  and  in  Ger- 
many the  average  haul  and  the  average  loading  are, 
because  of  differences  in  business  conditions,  very 
much  less  than  in  Canada  and  the  United  States.     In 


FREIGHT  RATES  IN  PRACTICE  135 

England,  it  would  be  too  expensive,  even  if  business 
were  so  conducted,  on  account  of  the  expense  of  termi- 
nals, to  hold  traifis  until  niaxiniuni  tonnage  was  ac- 
cumulated. The  ton-mile  rates  in  Canada  are  held 
down  by  the  long  hauls.  Ton-mile  rates  are  of  value 
as  a  measure  of  earnings  and  of  the  work  done  for 
earnings.  They  are  useful  for  comparative  pur- 
poses oidy  when  conditions  are  similar.  Since  they 
are  averages  of  all  kinds  of  traffic,  long  haul  and  short 
haul,  carload  and  less-than-carload,  high-grade  and 
low-grade  tonnage,  they  are  averages  which  do  not 
necessarily  afford  a  conclusive  criterion  of  the  reason- 
ableness of  a  rate. 

3.  Difjficultij  of  comparing  foreign  freight  rates.— 
The  difficulty  of  obtaining  any  common  denominator 
which  will  permit  the  freight  rates  of  different  coun- 
tries to  be  compared  is  illustrated  by  the  following 
table  which  shows  how  certain  essential  factors  affect- 
ing the  freight  rates  differ  in  different  countries:  ' 

A  verage  ca- 
parity  (if 
Ton  mile  Tons  per      Average  haul  freight  cars 

^"""t'-y  rate  train  in  miles  in  tons 

^"^-tria    i..-,ofl  211  65  14, 

^'"'""^  1    7.51  3U  203  33 

'••'i"^''    i.ia-i  1*7  77  li 

(■ermany     1.211  ;?39  gg                     j5 

''"•'■■«    fifi«  1R5  188 

N<".v  South   Wales..    l.,57.>  \12  88 

Switzerland     ;?.389  Mj  50                     \k 

Smith  .\Mstralia    ...    1.919  lU  88 

Suited    States  2    ...     .753  451  260                    38 

'The  figures   in  this  table  are   for  different  years.     As   the  table 
simply  illustrative  they  serve  adequately    for  this  purpose. 


1:36 


INLAN)  TRAFFIC 


4.  Terminal  chargen  kept  separate  from  rates. — In 
Knglaiid,  charges  for  station  and  other  terminal  serv- 
ices are  recognized  as  being  distinct  from  the  hauhige 
charge.  In  Canada  and  in  the  United  States,  the 
practice  has  been  to  (luote  an  in^hisive  rate.  Of  re- 
cent years,  however,  the  Interstate  Commerce  Com- 
mission has  shown  favor  to  a  (Hfferentiation  between 
a  road  haul  and  a  terminal  chargr.  Some  of  the 
State  Commissions  are  also  taking  the  matter  up.  It 
is  a  method  pursued  by  the  Wisconsin  Commission  in 
building  up  rates.  The  Nebraska  State  Commission 
in  dealing  with  intrastate  rates  found  that  the  aver- 
age direct  station  terminal  costs,  per  hundred  pounds, 
of  handling  L.  C.  L.  shipments  in  the  first  four  classes 
of  the  Western  Classification,  was  10.9  cents.  In  the 
Western  Rates  Case  evidence  was  submitted  to  the 
Board  that  on  a  380  mile  haul  the  terminal  exT^ensc 
was  35  per  cent  of  the  total  expense. 

5.  Two  leading  factors  in  freight  rates. — Lo^  oally. 
the  freight  rate  is  composed  of  two  factors — the  termi- 
nal charge  and  the  haulage  charge.  Whether  the  termi- 
nal service  is  carried  on  in  a  large  expensive  terminal 
or  at  a  small  wayside  stat'on,  the  service  is  distinct 
from  that  performed  in  the  road  haul.  In  the  Grand 
Trunk  terminals  a.  Ottawa,  it  takes,  allowing  space 
on  the  team  track  for  a  car  and  for  the  necessary  road- 
way for  access,  a  space  of  800  square  feet  per  car. 
This  space  at  $5  per  scjuare  foot  represents  an  ii; 
vestment  of  $4,000  per  car  for  freight-car  space,  with 
interest  at  6  per  cent,  this  would  mean  an  interest 


FREIGIir  RATES  IN  PUACTK  K 


lai 


charge  of  (>.>  cents  per  day  per  car  so  handled.  Tlien 
there  are  also  tlie  freight-shed  facihties  and  tlie 
switching  expenses.  Switching  movements  in  ter- 
minals have  hcen  computed  as  representing  an  ex- 
pense per  mile  of  from  six  to  twelve  times  that  in- 
curred per  mile  on  a  road  haul. 

In  the  terminal  cost  there  is  included  not  onlv  the 
cost  of  the  particular  movement,  hut  also  the  (jues- 
tion  of  its  contrihution  to  overhead  expenses.  Then, 
again,  there  is  the  complicated  (juestion  of  the 
joint  cost  of  the  ternunal  as  hetween  freight  and  pass- 
enger services.  Aside  from  large  expenditures  on 
l>assenger  stations,  it  is  to  he  remcmhered  tliit  the 
passengers  move  themselves  in  and  out  of  the  ter- 
minal; the  freight  has  to  he  moved. 

On  the  road  haul  there  are  the  expenses  for  the 
wages  of  the  train  and  engine  crews,  the  cost  of  fuel, 
oil  and  waste.  Here,  again,  there  is  not  only  the 
(juestion  of  the  cost  of  Ihe  j)articular  movelnent, 
which,  in  the  ease  of  a  trainload  movement  proceed- 
ing continuously  thru  a  division  may  i)e  comi)uted 
exactly  on  a  tonnage  basis,  there  is  the  further  and 
more  difficult  question  of  what  contrii)ution  the  com- 
modity moved  should  make  to  overhead  charges. 

iJoth  in  the  case  of  the  terminal  costs  and  of  the 
road-haul  cost  the  matter  is  complicated  by  the  fact 
tiiat  different  (piantities  may  he  concerned;  the  cost 
of  handling  carload  and  Icss-than-carload  quantities 
is  not  the  same. 

The  terminal  costs  at  l)oth  ends  of  the  haul  are  con- 


i 

i 

-%H.l 

138 


INLAND  TRAFFIC 


^ff 


stunt  whether  the  ha*  I  he  for  10  or  for  300  miles. 
But  ill  the  eost  of  the  road  haul,  tlie  serviees  incidental 
to  the  movement  do  i  i  -rease  in  the  same  ratio  as 

the  mileage.  Furi;\  iJi  •  necessary  terminal  cost  is 
ji  greater  percentagi  '.  h-  .oint  cost  on  the  short  haul 
of,  say,  10  miles  thai   ')i\         loniff  r  haul  of  300  miles. 


;i> 


ha    ' 


' charges  tend  U) 

aal  costs  chargcahk' 

me  of  less  important 

..  '  asis  of  ton-mile  earn- 


As  the  distance  incr 
vary  inversely,  whif       r 
against  the  niovemeiit  .lisi, 
per  mile.     That  is  to    ly,  < 
ings,  the  ton-mile  rate  tends  to  decrease  as  the  dis- 
tance increases. 

In  the  transshipment  of  grain  cargoes  at  Dei)()t 
Harbor,  the  I'arry  Sound  Railway  placed  grain  on 
cars  at  an  expense  of  25  cents  per  ton.  The  Board 
has  recognized  that  in  dividing  up  a  rate  to  arrive  at 
the  reasonableness  of  the  component  parts,  a  terminal 
expense  of  'iO  cents  per  ton  is  not  unreasonable,  liv- 
ers, in  his  "Kconomics  of  Railway  Operation,"  has 
figured  out  terminal  costs  per  ton  on  the  basis  of  Xeu 
York  figures  as  follows: 

Interest  and  depreciation    ilH.(] 

Station  services  and  shipping 41..'> 


ro.i 


6.  Switching  costs  at  Winnipeg. — In  1000,  the  Ca- 
nadian Pacific  made  a  computation  as  to  switchiiiL; 
costs  in  terminals  at  Winnipeg  on  line  haul  business: 
that  is,  on  carloads  recei\  ed  from  or  shipped  to  points 


FREIGHT  KATKS   IN    PK AC  TICK 


139 


.)iitside   WiiiMipcg.     Tlie   services   pertorined    wen* 

classiiied  as  follows: 

(ji)  The  expense  of  assembling  and  sorting 
thru  ears  was  eoinpiited  at  .%'MM)  per  ear.  This 
covered  18;),;>01  cars  handled  an  average  move- 
ment of  ;j,({()0  feet. 

(h)  The  placing,  sorting  and  assembling  of 
cars  for  local  sidings  in  C.  P.  H.  terminals.  This 
covered  1.34.202  cars,  with  an  average  movement 
of  7.200  feet.  The  cost  was  computed  at  $5.;i2 
per  ear. 

(c)    The   transfer   of  car>>   between   the   Ca- 
nadian  Northern  and  Canadian   l^icific  at   St. 
Boniface,  destined  to  or  received  for  siding  de- 
livery in  either  terminal,  cost  $({.05  per  car.    This 
covered  24.901  cars,  with  an  average  movement 
of  20,050  feet. 
The  cost  figures  were  based  on  interest  and  depre- 
ciation on  the  freight  terminals;  interest  and  deprecia- 
tion on  the  engines  used  exclusively  in  the  switching- 
service;  actual  cost  of  fuel,  oil,  waste  and  rei)airs  on 
these  engines;  actual  cost  of  wages,  superintendence, 
itc,  in  connection  with  terminal  work  exclusively. 

These  figures,  assunnng  that  ^he  cars  were  of  ,*iO- 
tons  capacity,  gave  averages  per  ton  as  follows:  (a), 
l-}.3  cents:  (b),  17.7  cents:  (c).  22.1  cents.  If  an 
average  of  all  the  cars  switched  is  taicen,  it  amounts 
t't  10  cents. 

7.  Terminal  co.st  in  Wi  scon  .sin. —The  Wisconsin 
Commission  worked  out,  some  years  ago,  compu- 


^u 


« 


uo 


INLAND    TRAFFIC 


tations  of  terminal  cost  per  ton  for  the  different 
classes  of  the  Western  Classification  as  follows: 


Classes    1 


n 


C         D         E 


$1.68     $1.39     $1.12     8ic.     (i'c.      750.     58o.     50c.     420.     ;}:{<• 

The  terminal  costs  thus  computed  are  arbitrary,  since 
they  vary  with  the  value  and  the  rate,  instead  of  bein/ 
exactly  proportioned  to  cost. 

Variations  in  terminal  expenses  will  be  found  not 
only  in  regard  to  the  cost  of  terminal  properties,  but 
also  in  connection  with  the  nature  of  the  loading. 

8.  Distance  as  a  factor  in  rates. — Examples  have 
already  been  given  showing  how  in  rate-making,  dis- 
tance may  be  minimized.  In  addition  to  those  al- 
ready given,  reference  may  be  made  to  the  system 
of  group  rates.  In  Illinois,  in  the  movement  of  coal. 
points  forty  miles  apart  have  been  grouped  under  the 
same  rate.  Under  the  Canadian  Pacific  coal  and  coko 
tariff,  already  referred  to,  the  Lethbridge  group,  in- 
cluding six  shipping  points,  covers  a  distance  of  fifty 
miles.  Examnlcs  of  either  the  originating  or  the 
destination  points  l)eing  grouped  are  (luite  common. 
Reference  nviy  be  made  to  the  class  and  commodity 
tariffs  west-bound  to  points  west  of  liake  Superior, 
includinar  the  Pacific  const:  to  the  rates  on  grain  and 
grain  products  from  Fort  AVillinm  to  eastern  points. 
Montreal  and  west  thereof;  and  to  the  rates  on  lumbu 
and  forest  products  from  the  coast  and  at  British 
Columbia  interior  mills  to  Eastern  Canada.    One  ex- 


-i 


NH 


'^m 


m 


FREIGHT    RATES    IX    PRACTICE 


141 


ample  will  serve.  In  the  shij)nient  of  luiiiher  east 
from  the  British  Columbia  mills  the  territory  to  the 
head  of  the  I^akes  was  prior  to  11)18  divided  into  the 
H)e  and  4oe  groups.  The  first  extended  to  Winnipeg 
and  ineluded,  so  far  as  the  lines  of  the  Canadian  l*a- 
eifie  are  coneerned,  4>',iO  destination  points,  while  the 
seeond  extended  to  Fort  William  and  inehided  149. 

The  regulative  tribunals  of  Kngland,  Canada  and 
tlie  United  States  have  recognized  that  reasonable 
grouping  is  permissible.  Groui)ing  arrangements 
usually  come  into  existence  where  there  is  a  consid- 
erable number  of  points  supplying  a  commodity  of 
general  demand  to  a  common  market.  Grouping  at 
the  destination  points  may  ilso  occur  when  such  a 
commodity  is  marketed  over  a  consideral)le  are.<  after 
a  long  haul. 

But  while,  because  of  special  conditions,  distance 
may  be  minimized,  it  is,  in  the  absetice  of  such  disturb- 
ing conditions,  always  to  be  reckoned  with. 

0.  Dififatnr  basis  of  rates  in  OJJicial  Classification 
Inritort/. — The  most  interesting  example  in  America 
of  the  adoption  of  the  distance  basis  of  rate-making  is 
io  be  found  in  the  territory  of  the  Official  Classifica- 
tion. This  territory  is  sulxlivided  into  Trunk  Line 
Association  territory,  which  may,  in  a  general  way,  be 
described  as  the  section  east  of  a  line  drawn  thru 
liuffalo,  Pittsburgh,  Parkers])urg,  West  A^irginia, 
"ud  Norfolk,  Virginia:  west  of  this  is  to  be  found 
C  entral  Freight  Association  territory  occupying  the 
remainder  of  the  Official  Classification  territory. 
XV  c— n 


14S 


INLAND  TRAFFIC 


In  the  early  seventies  the  railways  located  in  what 
is  now  the  territory  of  the  Official  Classification  were 
engaged  in  cut-throat  competition.  In  addition,  the 
water  competition  of  the  lake  carriers  was  also  felt. 
As  an  outcome  of  this  there  was  worked  out  a  system 
whereby  the  Chicago-New  York  rate  was  taken  as  a 
base  rate. 

The  rate  system  so  built  up  was  concerned  with  the 
movement  from  Central  Freight  Association  territory, 
in  which  are  located  some  8,000  stations.  Taking  the 
base  rate  as  100  per  cent,  the  shorter  distance  points 
have  rates  worked  out  on  a  percentage  of  the  base  rate. 
For  example,  on  the  movement  from  Detroit  to  New 
York,  Detroit  has  78  per  cent  of  the  Chicago  rate. 
Toledo  and  Sandusky  are  71  per  cent  points.  The 
rate  adjustment  works  westward  to  the  Mississippi 
River  crossings,  where  125  per  cent  points  are  to  be 
found. 

While  the  percentage  system  was  adopted  in  1870, 
there  have  been  various  readjustments  and  regroup- 
ing since  that  date.  Water  competition,  market 
competition,  and  the  effect  of  the  rail  movements  ot 
north  and  south  lines  working  in  thii.  territory  havt 
aided  in  bringing  about  the  system  as  it  stands  today. 
The  result  is  that  instead  of  percentage  points  then' 
are  percentage  groups.  While  the  system  was  con- 
cerned in  the  first  instance  with  the  movement  east- 
bound,  it  now,  in  general,  applies  west-bound  as  well. 
A  similar  system  is  made  use  of  in  the  movement 
from  points  in  Central  Freight  Association  territory . 


FREIGHT  RATES  I\  PRACTICE 


143 


intemiediate  to  Chicago,  to  points  in  Trunk  Line  ter- 
ritory intermediate  to  New  York. 

The  basis  on  which  the  percentages  are  wt)rke(l  out 
is  as  follows: 

From  an  assumed  rate  of  25  cents  from  Chicago  to  New 
York  there  was  first  deducted  the  sum  of  6  cents  to  repre- 
sent the  fixed  terminal  exjx'nses  at  the  j)oints  of  origin  and 
destination.  The  remaining  19  cents  represented  the  as- 
sumed charge  for  the  rail  haul  exclusive  of  any  service  at 
eitlier  terminal.  This  rate  being  divided  by  920,  that  being 
the  accepted  short  line  mileage  from  Chicago  to  New  York, 
yielded  a  rate  per  mile  of  0.0206  cent  for  a  movement  from 
Chicago  to  New  York  under  the  assumed  rate;  and  this  rate 
per  mile  was  used  as  the  factor  for  establishing  an  assumed 
basis  from  any  particular  junction  or  competitive  point  on 
the  basis  of  its  mileage  to  New  York.  That  factor  or  rate 
per  mile  multiplied  by  the  number  of  miles  from  the  par- 
ticular po'nt  to  New  Y'ork  gave  an  assumed  rate  for  the 
rail  haul  from  that  point  exclusive  of  any  terminal  service 
at  either  end  of  the  movement.  To  that  assumed  rate,  tlie 
six  cents  was  again  added  to  cover  the  terminal  expenses  at 
the  points  of  origin  and  destination.  The  result  gave  an 
assumed  rate  from  the  particular  ])oint  to  New  York  inchjd- 
ing  the  terminal  charges,  and  the  percentage  whicli  this 
assumed  rate  bore  to  the  assumed  rate  of  25  cents  from 
Chicago  to  New  York  determined  the  percentage  of  the 
Chicago  rate  which  the  particular  point  would  take  on  any 
given  class  of  merchandise. 

To  iUustrate  by  a  concrete  exani])lc,  the  short  line 
mileage  from  Indianapolis  to  New  York  is  8.33  miles. 
Then  833  times  .020()  (cent)  equals  17.2  cents. 
To  this  add  6  cents  for  fixed  terminals,  and  a  total  of 
23.2  cents,  or  93  per  cent  of  the  Chicago  assumed  rate 


MHr.^tar' ItlT  O^.XSBraBKrER.'SV 


PTC^y^s?? 


.■•CflMi.V^iTnCL.HL, . 


144 


INLAND  TRAFFIC 


of  25  cents,  is  obtained.     Theret'ore,  Indianapolis  is 
a  1)3  per  cent  point. 

10.  Dhtinclion  bctivccn  local  and  thru  rates. — A 
distinction  is  made  between  local  and  thru  rates,  altlio 
the  distinction  is  not  a  very  exact  one.  Sometimes  a 
local  rate  is  spoken  of  as  being-  concerned  with  a  short 
movement  on  a  given  railway,  and  a  thru  rate  with  a 
longer  distance  on  the  same  railway.  It  is  more  cor- 
rect to  speak  of  a  thru  rate  as  being  concerned  with  a 
joint  tariff  movement  over  two  or  more  railways. 
Under  the  Railway  Act,  the  railw  ays  are  required,  as 
incidental  to  the  movement  of  thru  traffic  over  two  or 
more  lines,  to  afford  facilities  for  the  due  and  reason- 
able receiving,  forwarding  and  delivering  at  the  re- 
quest of  any  other  railway,  of  thru  traffic;  and,  in  the 
case  of  goods  shipped  by  carload,  of  the  car  with  the 
goods  shipped  therein  to  and  from  the  railway  of 
such  other  company  at  the  thru  rate.  It  is  also 
provided  that  when  traffic  is  to  pass  over  any  continu- 
ous route  in  Canada,  oj)erated  by  two  or  more  com- 
panies, the  several  companies  may  agree  uj)on  a  joint 
tariff  for  such  continuous  route.  There  is  the  obli- 
gation also,  that  when  traffic  is  to  pass  over  any  con- 
tinuous route  from  a  point  in  Canada  thru  a  foreign 
country  into  Canada,  or  from  any  point  in  Canada 
to  a  foreign  country,  and  such  route  is  operated  by 
two  or  more  companies,  whether  Canadian  or  foreign, 
the  several  companies  are  to  file  with  the  Hoard  a  joint 
tariff  for  such  continuous  route.  It  is  similarly  pro- 
vided that  a  joint  tariff  is  to  be  filed  in  respect  of  a 


wan^nRBH 


mm 


FREIGHT  KATKS  IN   PKAtTICE 


145 


similar  movement  from  a  point  in  a  t'orei^ni  coimtrv 
into  Canada,  or  from  a  foreign  eountry  tliru  Canada 
into  a  foreign  conntry.  Prohibitions* are  contained 
in  the  Railway  Act  on  devices  whereby,  thru  break 
in  Imlk,  stoppage  or  interruption  of  u  movement  of 
traffic  an  attempt  is  made  to  interrupt  tlie  continuous 


carriage. 


Provision  is  made  in  the  Uailway  Act  that  where 
railways  subject  to  the  Board's  jurisdiction  fail  to 
agree  upon  a  joint  tariff,  the  lioard  may,  on  the  appli- 
cati()n  of  any  company  or  person  desiring  to  forward 
traffic  over  a  continuous  route  which  the  Hoard  con- 
siders a  reasonable  and  practicable  one,  recjuire  the 
railways  to  file  a  satisfactory  joint  tariff;  or  the  Board 
may  ('ptermine  the  rate  and  apportion  the  same  among 
the  companies  interested. 

It  is  the  practice  for  railways  to  file  concurrences  in 
regard  to  thru  rate  arrangements. 

11.  Arriving  at  a  thru  rate— A  thru  rate  may  be 
made  up  of  the  sum  of  the  local  rates  attaching  to  the 
mileage  haul  on  each  railway.  In  most  cases,  how- 
ever, the  thru  rate  is  less  than  the  mm  of  the  local 
rates.  In  each  of  the  local  rates,  costs  for  two  tcnni- 
nals  are  chargeable,  while  in  the  case  of  a  thru  move- 
ment over  two  or  more  lijics,  there  is  an  initial  and 
a  final  terminal  cost,  the  other  costs  in  res[)ect  of 
movements  from  one  line  to  another  being  in  the 
nature  of  transfer  charges.  It  has  not  appeared  fea- 
sible to  lay  down  any  rigid  rule  covering  all  cases  in 
regard  to  the  extent  by  which  it  is  proper  that  the 


j(,;^ 


146 


INLAND  TRAFFIC 


thru  rate  should  be  less  than  the  sum  of  the  locals. 
The  Board  has  ruled  that  where  a  thru  rate  exceeds 
the  sum  of  the  locals,  it  is  prima  facie  unreasonable  and 
the  burden  of  justification  is  on  the  railway. 

It  has  been  recognized  that  when  there  is  a  haul 
over  two  or  more  railways,  it  is  not  reasonable  to  di- 
rect that  the  thru  rate  shall  be  identical  with  the  rate 
for  the  same  mileage  over  the  line  of  a  single  rad- 
way;  for,  in  the  former  case,  there  is  a  subdivision 
of  the  rate  between  two  lines  as  well  as  a  transfer 

cost. 

In  dealing  with  the  reduction  of  coal  rates  in  the 
Western  Rates  Judgment,  the  Board  directed  that  a 
reduced  scale  of  rates  should  be  put  in;  and  further 
directed  that  on  any  given  movement  over  two  lines 
the  thru  rate  should  not  be  more  than  20  cents  a  ton 
over  and  above  that  applicable  to  the  thru  mileage  as 
for  one  carrier. 

REVIEW 

Distinguish  between  class  and  commodity  rates.  How  are 
commodity   rates   used?     To   what   movements   do   they   usually 

Compare  the  freight  rates  of  Canada  with  those  of  England 
showing  the  diH'ercnt  characteristics  which  influence  the  making 
of  rates  in  each  country. 

Wliat  are  the  two  factors  in  each  rate?  What  is  included  under 
each  ? 

Discuss  distance  as  one   factor  in   rate  making. 

What  is  the  distinction  between  local  and  thru  rates?  How 
is  a  thru  rate  arrived  at? 


mmmimmimmmmmmm 


CHAPTER  IX 

COMPETITIVE  EACTORS  IX  RATE  MAKING 

1.  Competition  of  lines  of  different  lengths.— 
W'liere  a  railway  has  to  meet  between  two  points  the 
competition  of  the  shorter  mileage  of  another  railway, 
the  short  line  mileage  rate  governs  of  necessity.  Ex- 
amples of  this  follow: 


I 


a 


Fort  VVilliani  to  Winnipeg —           C.P.,  419  miles 

C.N.,  436  miles 

G.T.,  449  miles 

Portage  la  Prairie  to  Winnipeg — t'.P.,  56  miles 

(i.T.,  54  miles 

Montreal  to  Toronto—                    G.T.,  334  miles 

('.P.,  345  miles 

ex.,  407  miles 

i'.V.,  487  miles 

I.e.,  735  miles 

(".P.,  256  miles 

C.N.,  258  miles 

(J.T.,  375  miles 

('.P.,  122  miles 

G.T.,  164  miles 

(i.T.,  69  miles 

t'.P.,  144  miles 


Montreal  to  St.  John,  N.  B. — 
Toronto  to  Ottawa — 

Toronto  to  Owen  Sound — 
Woodstock  to  Goderich — 
Cornwall  to  Ottawa — 


O.&X.Y.,    57  miles 
G.T.,         109  miles 


Differences  in  mileage  as  between  different  routes 

147 


I 


ill 


>■'' 

h 


U8  INLAND  TRAFFIC 

connecting  two  points  arc  common.  For  example, 
between  Chicago  and  Kansas  City  we  have  the  fol- 
lowing: 

Atfliison,  Topeku  «V  Sjintii  Fo 4.58 

Burlington  Route 489 

Chica^'o  ^:  Alton 488 

Chicago  Great  Westeni 597 

Chicago,  Milwaukee  it  St.  l»aul 498 

Rock  Island  Route 517 

Wabash    512 

But  the  competition  is  not  necessarily  limited  to 
that  existing  between  lines  of  slightly  differing 
lengths.  Once  a  railway  is  built  the  capital  is  fixed, 
and  so,  in  order  to  obtain  a  return  on  the  investment, 
it  may  participate  in  traffic  which  is  handled  by  an 
exceedingly  roundabout  route.  Between  New  York 
and  New  Orleans  there  are  about  one  hundred  all- 
rail  routes  which  may  compete  for  business.  The 
shortest  is  1,340  miles;  the  longest  is  .53  per  cent 
greater.  When  such  a  roundabout  route  coripetes 
for  this  business  it  must,  of  necessity,  reduce  its  rate 
on  the  principle  of  what  the  traffic  will  bear.  Under 
the  centralized  control  of  the  Railioad  Administra- 
tion theij  were  energetic  endeavors  to  utilize  direct 
routes  and  thus  lessen  the  extra  engine  mileage  of  i) 
roundabout  routes. 

Under  such  circumstances  the  anomalv  mav  arisr 
of  the  rate  being  controlled  by  tb<^  longer  line  or 
route,  for  the  longer  line,  not  being  able  to  give  the 
same  dispatch,  may  have  to  give  a  more  advantageous 


cuMi'irrniM:  factors  in  uA-ri:  making    u9 


rate.  Just  Ik  lore  the  Civil  War  the  (Hand  Trunk 
carried  flour  from  C'iiiea^o  to  iN)rlhui(l  hy  rail  and 
i  thence  by  boat  to  Hoston  in  competition  with  all-rail 
iVuierican  lines.  From  a  situation  like  this  mav  arise 
so-called  "differential"  rates. 

2.  Differential  ratcH.—A  differential  rate  arises 
when  two  or  more  competing  carriers  a^ree  that  a 
|)reseribed  difference  shall  exist  between  their  respec- 
tive rates.  This  may  be  regarded  as  a  concession  to 
avert  a  greater  cut  in  rates.  W'hcFi  the  Canadian 
Pacific  entered  the  field  of  thru  business,  it  engaged 
in  the  carriage  of  business  to  San  Francisco  by  means 
of  its  rail  route  to  its  Pacific  terminus  and  tlienee  by 
boat  to  destination.  It  took  the  position  that,  as  it 
was  a  broken  rail  and  water  route,  and  was,  in  its 
condition,  a  weak  route,  a  differential  should  be  al- 
lowed. It  also  emi)hasized  the  disadvantage  under 
which  it  labored  because  of  its  roimdabout  route— 
^.O'iO  jniles  by  rail  and  water  as  against  3,270  all 
rail. 

in  1887,  the  American  lines  agreed  that  on  business 
to  San  Francisv'(.,  the  Canadian  l»acific  might  quote 
lates  lower,  by  agreed  differences  in  cents  per  class, 
tlian  the  all-rail  American  lines.  At  the  end  of  1892, 
tlie  Canadian  Pacific  adopted  the  principle  of  charg- 
ing rates  ten  per  cent  less  than  tiiose  of  the  American 
imes.  The  latter  contended  that  this  was  not  a  differ- 
I'titial,  but  a  "cut"  rate,  since  they  had  not  agreed  to 
It.     The  matter  came  to  arbitration  in  1898,  when  it 


150 


INLAND   TRAFFIC 


was  decided  by  the  Board  of  Railway  Commissioners 
that  the  Canadian  Pacific  Raiiway  was  not  entitled 
to  a  differential  rate. 

The  Grand  Trunk  Railway  operates  under  a  dif- 
ferential freight  rate  from  Boston  to  Chicago,  all- 
rail,  of  seven  cents  first  class,  as  against  the  standard 
lines.  On  the  movement  of  freight  traffic  by  way  of 
Depot  Harbor,  it  has,  on  the  lake  and  rail  route,  a 
differential  of  11  cents  below  the  standard  lake  and 
rail  from  New   York  and  7  cents  from  Boston  to 

Chicago. 

3.  IVater  competition.— An  early  example  of 
water  competition  in  the  passenger  business  is  set  out 
in  an  advertisement  publishe<l  in  1788  by  the  Phila- 
delphia and  Baltimore  Eastern  Shore  stage  line, 
which  stated  that  its  coaches  would  carry  a  passengci 
from  Philadelphia  to  the  Susciuehanna  River  for  1  £ 
6  sh.,  and  from  that  point  to  Baltimore,  37  miles 
farther,  free  of  charge.  That  is  to  say,  on  the  last 
37  miles  of  the  journey  it  had  to  meet  the  competition 
of  water  carriers.  In  1840  the  stage  fare  from  Co- 
bourg  to  Peterborough  was,  in  the  winter,  10  sh. 
currency;  while  in  the  summer  by  stage  and  steam- 
boat it  was  7  sh.  Od. 

In  1892,  complaint  was  made  before  the  P^nglisli 
Railway  and  Canal  Commission  that  the  rate  on  flour 
and  grain  from  Bristol  to  Birmingham,  a  distance  of 
141  miles,  was  8  sh.  6(L.  while  from  Birkenhead  to 
Birmingham,  a  distance  of  98  miles,  it  was  11  sh.  (id. 


rOMPKTITIVE  FACTORS  IN  UATK  MAKI\(J      151 


The  eoiniiiissio!!  found  tliat  the  (litf'erence  in  rate  was 
due  to  ertieient  railway  and  water  eoiiipetition. 

In  the  transportation  system  of  the  seetion  of  \orth 
Aineriea,  whieh  niav  he  determined  hv  a  hne  (irawn 
lunth  and  south  thru  Omaha,  the  e^feet  of  the 
(ireat  Lakes  and  tlie  St.  Lawrenee  is  very  important. 
In  general,  the  average  rate  whieli  earries  a  ton  one 
mile  on  the  railwav  will  earrv  it  three  miles  on  the 
lakes.  If  the  various  grain  routes  to  the  seahoard  are 
considered,  the  importanec  of  the  alternative  water 
route  and  its  eompetitive  ett'eet  will  he  apparent. 

From  Chieago,  grain  may  move  eastward  to  the  sea- 
hoard  hy  the  following  routes:  to  Buffalo  hy  rail, 
tlience  via  the  Erie  Canal  and  Hudson  lliver,  or  hy 
ail-rail  to  New  York;  to  Erie  hv  lake,  thenee  hv  rail 
to  Philadelphia  or  Baltimore;  hy  lake  to  Canadian 
lake  ports,  thenee  by  rail  to  Montreal,  St.  John,  Port- 
land or  Boston;  by  lake  and  eanal  to  New  ^'ork;  all- 
rail  to  Philadelphia,  Boston,  New  York,  Baltimore 
and  Newport  News:  by  lake,  eanal  and  the  St.  Law- 
renee. That  is  to  say,  there  are  routes  to  eight  ports 
<»M  the  North  Atlantic  seaboard,  and  the  lake  route 
lias  a  controlling  effect  over  all. 

On  the  movement  from  Minneapolis  the  following 
routes  are  available:  all-rail  to  the  seaboard  via  Saidt 
Ste.  Marie;  by  rail  to  Gladstone,  Michigan,  and 
thenee  by  lake  an*,  canal  or  other  combination;  by  rail 
to  Duluth  or  Superior  and  thence  f)y  lake  and  canal 
or  other  combination. 
)ments 


i; 


Shipi 


grj 


Canadian  Northwest 


l.>2 


INLAND    TRAFFIC 


niiiy  move:  all-rail  t<»  the  seahoan.  \)\  rail  to  Fort 
VVilliani  or  Port  Arthur  aii<l  theiu-'  hy  hike  to  Ca- 
nadian lake  ports  and  thenee  eastward  by  rail;  or  1)> 
lake  to  Buffalo  and  thenee  eastward  by  rail  or  othti 
eonibination;  to  Duluth  by  rail  and  thenee  castwap! 
hy  lake  and  rail;  or  by  lake  and  eanal  combination, 
or  by  lake,  eanal  and  the  St.  Lawrenee. 

As   has    been    pointed   out.    in   the   movement    tc 
the   Paeifie  Coast,   water  competition  is   important. 
Some  years  ago  the  China  Mutual,  or  Blue  Funnel 
Line,  was  bringing    n  monthly  to  British  Columbia 
via  the  Suez  Canal  from  three  to  five  thousand  tons 
of  package  freight.     Of  late,  on  account  of  business 
depression  and  eastern  competiti<m,  the  importations 
l)y  this  route  are  It-ss.     This  is  distributed  east  into 
Alberta.     If  the  combined  ocean  and  rail  rate  west 
to  British  Columbia  is  to  get  a  share  of  this  busines 
it  must  meet  this  competition.    In  the  movement  of 
cotton  piece  gwifls  from  New  England  to  China  oyn 
the  Canadian  Pacific  and  its  connecting  steamships 
on    the    Pacific,    there    has    to    be    considered    tlu 
rate  offering  to  China  by  way  of  the  Suez  Canal. 
Meat  shipments  from  Canada  to  London.  England, 
may  move  r.ll-water  to  London,  or  by  water  carriers  tn 
Liverpool  and  by  rail  to  London.     The  water  rat. 
holds  down  the  combination  rate.    Shii)ments  of  prod- 
uce from  Denmark  to  Liverpool  may  move  all-wat<  • . 
or  may  move  by  water  to  the  east  coast  and  thence  i  y 
rail  to  Liverpool.    Here,  again,  the  wate-  rate  hohh 
down  the  combination  rate. 


,s 


...■i-i.-iiLMi    mmmr^mm^^'mfmmfF^ 


WaSt!^:^ 


\ 


(().mim:titivi:  fa(t()rs  in  hatk.makinc    i.w 


Till'   Huan]  1ms  ivco^rn/nl  that   rail  carriers  may 
have  to  iiuet  the  competition  of  water  carriers,      r  . 
position  ill  regard  to  water  c^.mpetition  is  Mimmari/ed 
in  the  Complaint  of  the  lUiml  Hirer  Hoard  of  Tnulc 
.l<ri(Je(J    March    12,    ll)i;j.     This   stated    that    water 
competition  was  somethin^r  over  w  ?   rh  the  l{ailwav 
Act  exercises  no  control  and  that  rail  carriers,  suli- 
.lect  to  the   Hoard's  ji.risdiction,  suhjccted  to  such 
co.npetition  mi>ht,  witliin  their  (iiscretion,  meet  it  to 
such  extent  as  they  thou^rht  fit      A  rate  tV.rccd  hy 
water  competition  is  not  the  IH•ce,vli^   iMcasurc  of  a 
rcasonahle  rate  where  such  compel  hit,/,   ioc    nf,t  exist. 
4.  ChatKjing  ecu  tins  of  production.     ln\  he  (Jnited 
States  the  westward  movement  of  the  a;4rieultural 
centers  has  had  an  influence  on  rates.     In  the  north, 
it  has  lessened  the  importance  .  f  Lakes  Krie  and  On-' 
tano  as  controllin^r  factors.     Ahout  the  time  the  Erie 
Canal  hecaine  an  efficient  carrier,  the  (ienesee  \'alley 
ni  western  Xew  York  was  important  in  wheat  produJ- 
tioM.     Since  the  seventies  the  center  of  wheat  produc- 
tion m  the  United  States  has  heen  movinw-  „(„th  and 
westward  until  now  it  is  west  of  the  Mississippi 

In  Western  Canada,  the  wheat  area  is  not  reach-d 
""td  at  a  point  some  four  hundred  miles  west  of  Lake 
;  Sn|,crior.  This  has  increased  the  traffic  importance 
<'l  the  Lpper  Lakes.  Coui)led  with  this  is  the  fact 
that  on  account  of  this  northward  and  westward  mnv^. 
im  lit,  east  and  west  lines  of  movement  from  Georgian 
P    i«ay  are  now  t  f  increasing-  imi)ortance. 

In  the  southern  portions  of  the  I  jiited  States,  the 


^■' 


'mi 


jiv}\mmC'Ui 


154  INLAND  TRAFFIC 

westvard  movement  of  the  cotton  crop,  as  well  as  the 
development  of  the  wheat  areas  of  Kansas  and  of  Ok- 
lahoma have  added  to  the  efficiency  of  ocean  compe- 
tition hy  way  of  the  CJulf  of  Mexico. 

In  the  United  States  this  westward  movement  of 
grain  has  created  a  competitive  area  extending  from 
the  international  bomidary  as  far  south  as  Kansas  and 
Missouri  and  west  to  the  western  boundaries  of  the 
Dakotas.  Its  effects  are  especially  noticeable  in  con- 
nection with  the  primary  grain  markets.  Grain  from 
the  Dakotas  and  Minnesota  is  normally  tributary  tc 
Minneapolis  and  Duluth;  it  may  move  to  Chicag(». 
The  grain  of  XUssouri  is  normally  tributary  to  St. 
Louis;  it  may  also  move  to  Chicago. 

5.  Competition  of  ports.— As  has  been  seen  in  dis- 
cussing water  competition,  Chicago  has  some  eight 
possible  outlets  on  the  North  Atlantic  seaboard. 
With  the  westward  development  of  American  rail- 
ways the  shoi  t  line  mileages  to  the  seaboard  have  been 
readjusted.  This  is  illustrated  in  the  following 
table : 

Short  Rail  Distances  from  Some  ok  the  Interior 

Grain  Markets  and  Packino-Hoise  Centers  to 

New  Vouk  and  New  Orleans 

To  To  Saving  to 

N«".v  York  N«w  Orleans      New  OrK-aii^ 

Chica^ro     9U  91J2 

Duluth    1,JJJ)0  l,''J'n  53 

Minneapolis    ...  l,im  1,268  M 

St.  Paul l,5iai  l,ii68  53 

Sioux  City 1,4J22  1,!^5«  164 


Tirr 


COMPETITIVE  FACTORS  I\  RATE  MAKING     155 

V     ^"    .  .        '^"  Suvinjrto 

^•^^^"'•k  NewUrl.ans       New  Orleans 

^'"^^'* l'^«2  1,070  332 

^uf^uqui'   1,079  988  91 

f}-  ^""it, 1'058  695  363 

Kansas  City...      1,335  y^y  ^^^ 

If,  be^rinning  at  Diiluth,  a  line  is  traced  riinning 
south  10  Lake  xMichiKan  and  following  the  western 
boundary  of  that  lake  to  its  southern  extremity,  thence 
swinging  southeasterly  until  the  south  Athmtie  sea- 
l)oard  is  reached  a  little  south  of  the  northern  bound- 
aiy  of  Georgia,  it  will  be  found  that  all  points  west  of 
this  line  are  nearer  to  the  Gulf  ports  than  thev  are 
to  Aew  York. 

Of  course,  the  mere  question  of  distance  is  not  the 
only  controlling  factor.  The  question  of  the  volume 
ot  traffic  moving,  the  matter  of  established  trade 
routes,  and  the  amount  of  ocean  tonnage  offering  at 
the  port  are  important  factors.  As  between  M(,nt- 
real  and  New  York,  the  volume  of  ocean  tonnage 
"ffering  is  necessarily  an  important  factor.  In  the 
<liscussions  which  have  taken  place  with  regard  to  the 
question  of  a  differential  or  difference  in  rates  to  l)e 
allowed  Boston,  Philadelphia  and  Baltimore  as 
.'.^nunst  New  York,  the  latter  city  has  emphasized  the 
fact  that  there  is  an  estabbshed  trade  route  from  its 
|»orts  by  which  a  large  volume  of  tonnage  is  constantly 
moving. 

«.  Markcf  or  trade  competif!nv.~AH  industries  ex- 
pand  they  naturally  develop  competition  in  common 
'i-arkets.     In  the  adjustment  oi'  their  rates,  the  rail- 


i||iM!lj 


-^.'■:«>;i*v.v    ". 


'"^t^i 


156 


INLAND  traffic: 


ways  are  wmstaiitly  faced  with  tlie  (iiiestion  of  this 
competition  and  of  the  extent  to  which  they  will,  hx 
readjustment  of  rates,  extend  the  area  in  which  indus- 
tries may  compete.  Wastes  of  transportation  may 
arise  from  this  overlapi)inK  «*'  markets. 

The  sut»ar  refining  industry  of  Canada  affords  a 
striking  example  of  trade  competition.  Sugar  re 
fineries  located  at  Halifax,  St.  John,  Montreal  and 
Wallacehurg  compete  in  Toronto  and  the  Canadian 
Northwest.  A  sugar  refinery  located  in  Vancouver 
meets  the  competition  of  the  eastern  refineries  in 
Manitoba.  The  Knight  Sugar  Refining  Company, 
of  Raymond,  Alberta,  is  also  engaged  in  the  manu- 
facture and  distribution  of  sugar  in  Alberta.  \Vh:it 
are  the  boundaries  of  the  respective  markets' 
Where  shall  the  rates  meet  f 

Again  in  the  readjustment  following  the  25  pci 
cent  order  in  11)18  the  refineries  on  the  seaboard  de- 
sired an  adjuiitment  which  would  enable  them  to  do 
business  west  of  Montreal.  The  Dominion  Sugur 
Company,  of  Wallaceburg,  said  "should  the  AtlantK 
seaboard  relineries  be  given  any  consideration  .  . 
we  woultl  .  .  .  re(iuest  the  Board  to  give  us  similar 
consideration   from    Wallaceburg   and   Chatiiam    U, 

points  east." 

7.  Nates  for  sugar  and  o/7.— Sugar  moves  w.  st 
from  Montreal  on  a  fiftli-class  rate;  it  moves  fnm 
Vancouver  on  r  commodity  rate.  Under  this  ar- 
rangement the  rates  meet  at  Portage  la  Prairie,  Man 


COMPETITIVK  FACTOUS  IN    KATE  MAKING      157 

itoba.  When  the  Board  »)y  its  order  in  the  Re^Hna 
Kates  Case  reduced  rate.^  westward  from  fort  VVil- 
hani,  coniphui.t  was  made  by  the  reHnin^  company  at 
\'ancouver  that  this,  by  extending  the  Monti:/al  terri- 
tr)ry  westward,  had  resulted  in  curtaih.ig  the  territory 
naturally  tributary  to  V'arKou\er. 

The  Imperial  (>jj  Company  has  a  rcfinerv  at  loco. 
»eir    \'ancouver,   in   which   it    reHnes    Peruvian  oil. 
From  Vancouver  to  Calgary,  a  distance  of  dMi  miles 
the  rate  in  11)15  was  84  cents.     Caspar,  Wyoming,  is' 
in  a  new  oil  Held  which  ships  north  by  way  of  Coutts, 
Alberta,  to  Calgary,  a  distaficc  of  "soO  miles.     The 
nite  from  Caspar  to  Calgary  was  $1.11.     The  Im- 
perial Oil  Company,  being  subjected  to  this  competi- 
tion, and  contending  that  its  cost  of  bringing  oil  in 
tank  vessels  from  Peru  should  be  considered  as  a.^ainst 
the  lower  cost  of  obtaining  oil  at  C^isi)ar,  desired  to 
have  its  rate  to  Calgary  reduced  to  70  cents.     The 
Canadian  Oil  Company,  whose  reHrierv  is  at  Petrolia 
also  ships  into  the  Canadian  AVest;  and  its  position 
was  that,  if  on  account  of  competitive  conditic.ns,  the 
rate  from  Vancouver  was  reduced  east,  the  rate  from 
I'etrolia  should  be  reduced  west.     The  shortest  rail 
route,  thru  the  United  St  ites.  from  I»etrolia  to  Cal- 
vary is  1,972  miles.     By  the  ail-Canadian  route,  it  is 
-\275  miles. 

In  distril)uting  its  products  the  Imperial  Oil  Com- 
pany ships  to  Manitoba  from  its  Sarma  reHnerv  by 
uay  of  the  Lakes  and  Fort  William.     Saskatchewaii 


'dv 


....^.MLs,  . 


XV 


12 


158 


INLAND  TRAFFIC 


is  supplied  from  its  Regina  refinery  which  obtains  its 
crude  oil  from  Wyoming,  while  Alberta  is  supplie<l 
by  the  loco  refinery. 

The  Canadian  Oil  Company  applied  to  the  Board 
to  reduce  its  rates  from  Petrolia  to  the  Northwest  to 
meet  the  competition  of  American  oil  refiners  selling 
in  the  same  field.  It  was  recognized  that  the  compet- 
ing companies  had  certain  situation  advantages,  water 
competition  and  low  cost  of  raw  material.  On  this 
state  of  facts  it  was  held  that  the  rates,  not  being  chal- 
lenged as  unreasonable,  and  the  trade  disadvantages 
not  having  been  created  by  the  Canadian  railways,  the 
directkwi  asked  for  could  not  be  given.  While  it  is 
the  function  of  a  rate-regulative  tribunal  to  deal  with 
reasonableness  of  rates,  it  is  not  concerned  with  so 
equalizing  trade  profits  that  all  may  compete  on  an 
even  keel. 

8.  Kates  for  complementary  cotnmodities. — Again, 
in  another  case  it  was  contended  that  cheese  anil 
bacon  are  complementary  commodities  and  that  the 
price  of  cheese  in  England  is  regulated  by  that  of 
l)acon.  It  was,  therefore,  urged  that  this  should  hv 
considered  in  Canada  in  fixing  the  rate  basis  on  export 
traffic.  It  was  held  by  the  Hoard  that  this  was  ;i 
phase  of  market  competition,  and  that  the  extent  to 
which  the  railways  should  consider  it,  if  the  rat*  s 
actually  charged  were  not  unreasonable,  was  at  then 
discretion. 

Just  hifW  the  claims  of  competing  industries  locatv'! 
on  different  sections  of  the  same  line  of  railway  are  to 


COMPETITIVE  FACTORS  IX  HATE  MAKING     159 

be  adjusted  is  a  matter  of  extreme  delieaey  and  diffi- 
culty. The  lioard  has  reeo^jn/ed  in  a  case  of  sueh 
competition  arisin^r  fn,,,,  an  inchistry  located  on  an- 
other hne,  that  in  the  ease  of  brick  from  Bradford, 
Pennsylvania,  movin^r  thru  Canada  to  Windsor  and' 
Detroit,  when  the  \\'in(Is()r  rate  on  tliis  article  was 
hicrher  than  the  Detroit  rate,  the  Detroit  rate  was  held 
down  by  the  trade  competition  of  the  similar  brick  pro- 
duced at  other  points  in  Ohio  whicli  were  nearer  to 
Detroit.  If  the  brick  moving  the  longer  distance 
from  Bradford,  was  to  share  in  the  Detroit  business,  it 
had  to  meet  the  Ohio  rate. 

9.  Scope  of  market  competition.— MarktY  eomjjeti- 
tion  is  not  limited  to  domestic  movement  alone.     The 
rate  that  grain  can  stand  depends  upon  the  price  at 
which  grain  stands  in  the  world-market.     In  that  mar- 
ket Russia,  India,  Australia,  Argentina,  Canada  and 
the  United  States  compete.     The  wheat  of  Argentina, 
which  is  for  the  most  part  grown  within  four  hundred' 
miles  of  tidewater,  and  the  gieater  part  of  whose  car- 
riage to  Liverpool  is,  therefore,  by  water,  competes 
with  the  wheat  of  Canada  and  of  the  Tnited  States 
which  has  a  rail  haul  of  two  thousand  miles  to  the  sea- 
board.    Canadian  bacon  must  compete  in  England 
with   Danish  bacon.     Canadian   butter  compet^'s   in 
Kngland   with   butter   from   Denmark   and   Siberia. 
Copper   from   Butte,   Montana,   competes   with   the 
uater-borne  copper  from  the  Uio  Tinto  mines. 


11; 


it 


#M»i" 


JMIHMtr 


160 


INLAND  TRAFFIC 


REVIEW 

What  is  a  differential  rnte?     Illustrate. 
How  does  water  competition  exert  an  influence  on  rates? 
Show  how  clianging  centers  of  ))oj)ulation  art'ect  rates.' 
In  Competition  between  ports  what  influences  are  important? 
Discuss  market  competition.     Is  it  limited  to  domestic  mar- 
kets? 


CHAPTER  X 


PHASES  OF  RATES  AM)  TARIFFS 

1.  Freight  tariffs  and  the  RailTvat/  Acl.—K\ti'\ 
tariff  carries  on  its  face  the  serial  number  of  the  rail- 
way's issue;  also  the  date  of  issue  and  the  effective 
date.     For  example,  the  Grand  Trunk  tariff  deal- 
mg  with  grain,  ex-lakes,  issued  July  31,  1020  effec- 
tive September  3,  1920,  bears  tiie  notation  C.  G.  No. 
123,  canceling  C.  G.  98  and  sups.     In  addition,  it 
has  to  bear  a  Canadian  Railway  Commission  serial 
number— in  this  case  it  is  C.  R.'c.  Xo.  E  4233.     A 
tariff  may  be  amended  by  a  supplement.     In  the 
United  States,  the  Interstate  Commerce  Commission 
rule  is  that  the  numl)er  of  supplements  which  may  be 
outstanding  is  governed   by  the  size  of  the  tariff. 
Tariffs  filed  with  the  Interstate  Commerce  Commis- 
sion must  bear  an  I.  C.  C.  numl)er.     Tariffs  con- 
cerned with  the  transit  trade  or  with  business  from 
the  United  States  to  Canada  or  vice  versa  bear  the 
serial  numbers  of  both  commissions. 

Under  the  Railway  Act,  freight  tariffs  are  classed 
as  standard,  special  and  competitive. 

2.  Standard  tariff.— The  standard  freight  tariff  or 
tariffs  specify  the  maximuiii  inileage  tolls  to  be 
charged  for  each  class  of  the  freight  classiHcation  for 

Kil 


■^ 


162 


INLAXD  TRAFFIC 


all  distances  covered  by  the  railway.  The  distances 
are  expressed  in  groups.  The  Railway  Act  permits 
relatively  greater  distances  to  be  included  in  these 
groups  for  the  longer  than  for  the  shorter  hauls.  The 
standard  freight  tariff  has  to  be  filed  with  the  Board 
for  its  approval.  \\'^hen  it  is  approved,  it  must  be 
published  in  two  consecutive  weekly  issues  of  the 
Canada  Gazette  ^scfore  it  can  become  effective. 

3.  Steps  in  development  of  standard  tariffs. — The 
Standard  Freight  Tariffs  of  the  Canadian  Pacific  may 
be  taken  as  representative  of  other  railways  operating 
in  the  same  territory,  the  only  point  of  difference  aris- 
ing is  in  respect  to  the  stations  forming  the  geographi- 
cal limits  of  a  given  standard  freight  territory. 

Before  the  decision  of  the  Board  in  the  Western 
Rates  Case,  in  191 4-,  there  were  two  standard  scales 
east  of  Port  Arthur  and  Fort  William,  and  five  main- 
land scales  in  the  West.  Those  east  of  Port  Arthur 
and  Fort  William  were:  (a)  from  Sudbury  east  to 
the  Atlantic;  and  (b)  from  Sudbury  west  to  Port 
Arthur  and  Fort  William.  The  eastern  standards 
are  on  what  is  known  as  the  Canadian  Freight  Asso- 
ciation Scale.  Practically  all  the  railway  mileage 
in  Eastern  Canada  is  on  this  basis. 

The  development  of  standard  tariffs  in  "\>^esterii 
Canada  began  with  the  issuance  of  the  Canadian  Pa- 
cific tariff  issued  May  1,  1881,  and  which  was  applica- 
ble in  Manitoba.  This  tariff  was  adopted  apparently 
from  rates  then  applying  in  the  adjacent  states  of  the 
American  union.     The  rates  were  built  up  on  the 


SSSftfil*: -. ;. 


PHASES  OF  RATES  AND  TARIFFS         163 

Joint  Northern  Classification  then  in  force  in  the  ad- 
joining territory.     In  this  classification,  first  class  was 
double  fourth.     When  the  mileage  extended  west- 
ward, the  standard  tariff  was  extended.     By  181)4,  a 
standard  mileage  tariff  known  as  Xo.  270  had  devel- 
oped.    The  modifications  by   way  of  reduction  re- 
ferred to  in  another  connection,  started  from  this  as  a 
base.     The  tariff  in  (juestion  also  applied  in  British 
Columbia,  so  far  as  the  rates  were  concerned.     The 
l)ase,   however,   was   different.     In   building  up  the 
mileage,  the  railway  considered  that  the  higher  cost  of 
operation  in  the  mountains  justified  assumed  mileage 
being  used.     From  Wincouver  to  ^'ale,  at  the  head  of 
navigation  on  the  Fraser  Kiver,  actual  mileage  was 
used.     From  Yale  to  Uevelstoke,  each  mile  counted 
as  1|  miles;  while  from  Uevelstoke  to  Canmore  each 
mile  counted  as  2  miles.     When  the  Crow's  Xest  ex- 
tension was  made,  it  also  was  put  <jn  the  basis  of  1 
mile  counting  as  2. 

4.  Standard  scales  in  the  Jf'f.v/.  -West  of  Lake 
Superior  the  standard  scales  which  applied  were  as 
follows  : 


(1)  The  Manitoba  scalo,  which  is  in  ofFt'ct  tliruoiit  Mani- 
toba, excepting  the  Canadian  Northern's  Le  Pas  Line,  an<l 
in  Ontario  west  of  and  inchiding  I'ort  Arthur.  Its  general 
basis  is  15  per  cent  lower  than  the  Canadian  Pacific's  maxi- 
imini  mileage  tariff  No.  270  of  1H94,  which  covered  the  en- 
tire territory  between  Lake  Superior  and  the  Rockies.  This 
IS  the  reduction  which  was  required  to  be  made  bv  tin- 
Canadian  Northern  as  a  result  of  the  Bond  (iuarantee  Act 
of  .Manitoba,  Chapter  39  of  the  Statutes  of  1901. 


yr 


164 


INLAND  TRAFFIC 


*l 


I 


H 


ill 


(2)  The  Saskatchewan  srak-,  in  cffict  tl.ruout  SaskatclK- 
wan.  also  ,n  Allx-rla,  .-xctptin^  the  .sh„rt  (  mnWia.    IVifir 
Mount«„,  section  „t  r>0  uuUs  hetween  Cann.ore  and  Lafr»an, 
ami  (he  Gran.1  Trunk  PaeiHe  .est  of  T  .ornton.      It  apphes 
also  on  that  portion  of  the  Cana.lian  Northern'.s  Le  Pas  Line 
u.th.n    Man.tohu.      This    seale    is    Kenerallv    7':.    per    cZ 
owe,-  than  the  nn.forn,  -rrairi.."  tariff  ^o]  27(rah!,s.   „„,, 
hone,     the  rechirhon  In-in^r  eon.pk-nu  ntary  to  that   nuule  in 
A  la  ntoba  hy    he  (  ana.han  I'a<-.ic.      I,  .as  ^oIunta^v  on  th. 
pait    of   the   (oM.pany   whieh    was,    at    that    time,   the   only 
(oinpan.y    operating    in    Saskatchewan    and    Alherta.      Thi. 
rate  basis  was  adopted  l,y  the  Canadian  Northern  in   those 
sections  of  the  two  Provinces  opened   up  later  on   hv     hat 
(  ompany. 

P.iifi  ''^ '"•.T''""**'""  r"'^''    •"    '^''^    ""    the    Cana.han 
Panfics  ra.l   Imes  west  of  (row's  Nest  and  Can.nore;  a.,o 
on  the  following  railways  under  (.reat  Northern  control,  viz.. 
Hie   (rows    Nest    Smithern,    the    Hedlington   «:    Nelson,   th, 
Rod  Mountain,  the  Nelson  ^  Forf  Sheppard,  and  the  V«. 
coiner,  \  ictoria  .V  Eastern,  east  .,t  Kil^ard,  B    C 

«r,  r  of  1S94;  hut,  ow.n^r  to  the  ^.reater  cost  of  construe 
t.on  and  operation  in  Uritisl,  Cohnnhia,  one  n.ile  is  counted 
Hs   two   pranu  tariff'  miles  for  distances   up  to  m)  miles 
those  over  i><H)  miles,  and  up  to  the  schedule's  limit  of  750 
Allies,   be.nff  «ra.lnated   on   a   somewhat   lo„er   tho  iuilefinit. 

f"'";  TJi";//"''.''"^"  '"""^   '''^'  first-class  rate  is  $2.4«i  in 
stea.l  of  .$o.!)5  as  it  would  he  on  the  two  for-one  ba.L,  bei,.,. 
a  nnlea^.e  increase  of  4f>-:,  per  cent.      No  abatement  in  Hrit": 
isli  (  ohimbia  followed  the  prairie  reductions  of  l})()o 

(4)    The  -Lake"  scale  between  ports  of  call  and  landini; 
of   the   (  anad.an    Pacfic    Railway    steanu-rs    and    bar^.s    on 
Arrow    Kootenay.  Siocan,  Trout  an.l  Okanagan  Lakes  an.i 
the  (  olumlua  R.ver;  also  on  the  iwo  renu.inirwr  (;,vat  North 
orn  contro  led  prop.rh-es;  vi/.,  the  New  Westminsf.  .-  South 


em,  and   the  Y 


.f  K 


ilff.'ird.  B.  ( 


ncouver,  Victoria  R:  Kastern   H 


Electric  Railway  ('omf)anv 


nm\  on  tho  lin.s  of  the  BritiM,  C 


^av.  wes' 


oiunib 


PHASKS  OF  HATKS  AM)  TARIFFS  165 


Tliis  scali'  is  virhmllv  flu-  tint  pniirit-  tariff  No.  S>7()  of 
1H94.  The  (irtat  NOrHuiii'.s  iiiaxinmin  ratt-s  on  tin-  two 
rail  sections  naimd  nrv  tlit-  saiiii'  as  thosi-  ol  flit-  Canadian 
i'aciHf  on  tin-  inl.ind  wati-r  .stn-tclifs,  bivause  the  Hoard 
n(|uircd  tliiiii  to  be  so,  —these  lines  hein/r  in  the  Naneoiiver- 
\  ale  di.friet;  and  the  sanie  is  true  of  those  lines  of  the 
Uritish  ('ulunil)ia  Kleetrie  Kailwav  Coinpanv  which  are  sub- 
net to  the  jurisdiition  of  the  Hoard. 

{•'))  The  "Lake-and  rail  and  Inter-Lake"  scale,  applicable 
fo  traffic  interchanged  betui.n  the  Kootenay  Lakes,  and  be- 
tween the  steanirr  landings  and  rail  stations  of  the  Canadian 
Tacific  in  West  Kootenay  and  the  Boundary  district.  This 
scale  is  conside.ably  higher  than  the  last  mentioned  "Lake" 
scale,  bit  somewhat  lower  than  the  ''Mountain"  scale   (No 

>.  Xew  ncales  adopted—The  jud^nicnt  in  the 
AVestern  Rate  Case  directed  that  these  five  western 
stan(hird  scales  should  he  re(hiced  to  three  to  he  kni»  'ii 
as  The  Prairie,  The  J»acitic,  and  Tlie  British  Coluni- 
l»ia  Lakes  Standard  tariffs. 

().  Prairie  Standard  tariff  replaces  Saskatehetvan. 

The  I'rairie  Stanclard  tariff  was  made  to  cover  the 
section  formerly  covered  under  the  Saskatchewan 
M'ak.  The  niaxiniuni  basis  was  to  he  that  of  the 
standard  tariff  of  niaxiiuuni  nnlea«»c  rates  then  in 
torce  in  Manitoba  and  New  Ontario.  Formerly,  the 
initial  milea«4c  rrroup  west  of  the  Lakes  was  ten  miles. 
This  ^roup  was  broken  up  so  the  initial  ^roup  is  now 
tivc  miles.  Tliis  reduction,  and  the  re-^roupint,' 
'"•ou^dit  if,  meant  consi(lcrai)le  reduction  in  re^rard  to 
Alh(  .  ta  and  S-iskatclu'w.-ts. 

The  westeifi  !)oundary  of  the  territory  covered  hv 


iJi." 


^m. 


MICROCOPY    RESOLUTION    TEST   CHART 

(ANSI  and  ISO  TESV  CHART  No.  2) 


1.0 


I.I 


150 


2.8 

||3_2 
■  3.6 


Li 


2.5 


2.2 
1.8 


^  APPLIED  IIVMGE     I 

^^  1653   East   Main   Street 

I^S  Roctiester.    Ne*   York         14609       USA 

'-^S  (716)   482  -  0300  -  Phone 

^S  (^'6)    288-  5989  -  Fax 


166 


INLAND  TRAFFIC 


I 


this  standard  extends  to  Canmore  and  Crow's  Nest, 
on  the  Canadian  Pacirie ;  to  Tollerton,  Alberta,  on  the 
Canadian  Northern,  and  to  Thornton,  Alberta,  on  the 
Grand  Trunk  Paeifie. 

The  tariff  covers  a  mileage  of  2100  miles.  Up  to 
100  miles  the  groups  advance  by  tive-mile  steps,  from 
100  to  500  there  are  ten-mile  steps,  from  500  to  1 ,500 
there  are  twenty-five  mile  steps;  the  balance  of  the 
mileage  is  divided  up  into  fifty-mile  groups.  The 
result  of  this  was  that  the  hitherto  existing  Manitoba 
scale  was  adopted  as  the  scale  for  the  Prairie 
Provinces. 

7.  EiVtension  of  Manitoba  scale. — The  Board,  deal- 
ing in  the  Regina  Rates  Case  with  the  question  of  dis- 
crimination as  between  Winnipeg  and  Regina,  had 
recognized  the  propriety,  within  limits,  of  the  exten- 
sion of  the  jNIanitcba  scale.  It  was  now  recognized 
that  the  class  of  commodities  offered  for  carriage,  and 
the  climatic  and  operating  conditions  of  the  districts 
being  largely  the  same,  it  would  not  be  fair  on  the 
ground  of  density  of  traffic  to  give  Manitoba  an  ad- 
vantage which,  in  a  great  degree,  was  derived  from  a 
volume  of  tonnage  arising  in  the  first  instance  in  Sas- 
katchewan and  Alberta. 

8.  Pacific  Standard  tariff. — In  de-limiting  the 
Pacific  Standard  Tariff  it  was  r-^cognized  that  both 
the  construction  and  railway  operation  thru  the  moun- 
tains are  much  more  expensive  than  on  the  prairies. 
The  Pacific  Standard  covers  2,200  miles,  and  its  east- 
ern Ihnits  begin  at  the  points  already  indicated  as  tiie 


PHASES  OF  RATES  AND  TARIFFS 


167 


uestern  boundary  of  the  Prai'-ie  Standard.     The  rate 
groups  are  the  same  as  in  the  case  of  the  Prairie 
Standard.     Tlie  hirger  part  of  the  mileage  grouped 
under  the  Pacific  Standard  is  concerned  simply  witli 
the  provision  of  an  interchange  mo\  -ment.     The  ex- 
treme movement   local  to  British   Columbia   is   750 
miles.     In  consideration  of  the  difficulties  of  operat- 
ing mountain  mileage,  cost,  c  tc,  the  rates  are  weighted 
-that  is  to  say,  up  to  a  distance  of  7oO  miles  each  mile 
IS  given  the  rate  chargeable  on  the  Prairie  Standard 
for    li    miles.     Beyond  this,  the  rate  is  held  down 
on  the  longer  movement  by  being  tied  up  to  the 
Prairie  Standard  rates.     For  distances  over  750  miles 
the  Pacific  Standard  rates  are  made  by  adding  the 
differences  of  the  Prairie  Standard  twentv-iive-mile 
groups.     For  example: 

750  miles  Prairie  Standard  is  161  cents  first-class 
775  miles  Prairie  Standard  is  164  cents  first-class 

a  difference  of  3  cents.  As  750  miles  on  the  Pacific 
standard  is  209  cents  first-class,  the  rate  for  775  miles 
IS  made  by  adding  the  above  difference  of  3  cents,  giv- 
ing a  rate  of  212  cents.  From  what  has  been  said,  it 
IS  apparent  that  it  is  on  the  interchange  movement  be- 
tween standard  tariff  territories  that  the  effect  of  this 
IS  felt. 

1).  British  Columbia  Lakes  Standard  tariff. —The 
British  Columbia  Lakes  Standard  tariff  applies  lo- 
cally between  ports  of  call  on  the  Arrow.  Slocan, 
Kootenay,    Trout    and    Okanagan    Lakes    and    the 


168 


INLAND  TRAFFIC 


i 


() 


Columbia  River.  It  does  not  apply  where  rail 
haul  intervenes.  The  tariff  covers  150  miles.  Up  t 
100  miles  the  groups  advance  in  five-mile  steps,  be- 
yond that  there  are  ten-  mile  steps.  This  was  amended 
in  September,  1916,  by  ihe  dropping  of  Trout  Lak. 
on  account  of  the  elimination  of  ports-of-call  on  that 
lake. 

The  standard  rates  are  exclusive  of  marine  insur- 
ance. Bulk  freight  will  not  be  accepted  for  ship- 
ment to  or  from  points  where  a  boat  haul  is  involved. 
Heavy  and  bulky  articles  moving  under  the  standard 
tariffs  in  Western  Canada  will  be  accepted  under 
special  contract  only. 

10.  Where  mojc'.mum  rates  of  Pacific  Standard 
apply.— The  maximum  rates  of  the  Pacific  Standard 
are  chargeable  between:  (a)  any  two  rail  stations, 
both  of  wliich  are  west  of  the  western  termini  inclu- 
sive of  the  Prairie  Standard  tariff;  (b)  any  station 
so  situated,  and  any  advertised  port-of-call  on  tlie 
Arrow,  Slocan,  Kootenay,  Trout  and  Okanagaii 
Lakes,  and  the  Columbia  River;  (c)  any  station  or 
port  of  call  so  situated,  and  any  point  east  of  the 
west  .  termini  of  the  Prairie  Standard  tariff  to  an. I 
including  Port  Arthur. 

11.  When  combination  rates  appit/.— The  tariffs 
apply  both  on  local  and  interchange  traffic.  In  tlie 
handling  of  freight  under  the  standard  tariffs  between 
points  east  and  west  of  Canmore  or  Crow's  Xest.  if 
it  is  found  that  a  combination  of  rates  to  or  from 
Canmore  or  Crow's  Xest,  and  stations  east  thereoi, 


PHASES  OF  BATES  AND  TARIFFS         169 

under  the  Prairie  Stan.Iar.l,  a,„l  rates  t<,  or  Iron,  these 

"m,ts  under  the  I'aeiHe  Stan.lanV  n.akes  a  Jow.r 

hru-rate  than  would  result  Iron,  t<,e  application  o 

the    hru-rate  under  the  l-aeiHe  Standard    then,    ul 

lonibination  is  authorized  to  ai>ply 

12_  Wlwn  ,iamh,nl  milcayc  'tariffs  apph/.-Th^ 
standard  nnleage  taritfs  refer-e.!  to  ab„4  a.plv  in 
the  absence  of  special  tnriff,.  „..,*■        ■  '  ' 

rh»„„i„  1     '^^^''"  "'""'>  quoting  lower  rates. 

int  th,t    "^^^  ""  'nterchange  business,  the  rule  be- 
ng  that  m  a  movement  f  ron,  a  higher  tariff  division  to 

13.  rVh,,  rate  scales  rf/#<T.-Referenee  to  the 
hgures  g,ven  m  connection  with  the  stan.lani  tariffs 
«H  show  that  the  rate  scales  are  different  in  different 
sections     As  has  been  pointe-J  out,  the  classification 

rlf  ^"l''  "  ''""*  "P  ""  '°"''^  '^i-'  instead 
t  fif  h,  as  in  the  east.  The  B.  C.  Lakes  Standard 
s  on  the  same  basis  as  the  Prairie  Standard  since  the 
I'nner  is  a  matter  of  lake  operation  and  there  are  not 
lie  special  conditions  of  cost  present  which  have  been 
A-en  as  j.istiljing  a  higher  basis  on  the  mountain 
territory  of  the  Pacific  Standard. 

U.  Standard  rates  arc  marhmm  r«<«.— Thev  an- 

Pi.v  only  where  there  are  no  lower  special  tariffs"     It 

IS  impossible  to  make  any  general  statement  of  how 

niiich  lower  the  special  tariffs  arc  than  the  standard 

.Tiffs  for  any  particular  section.     It  is  safe  to  say 

hat  from  90  to  Qo  per  cent  of  the  traffic  moves  on 

rates  lower  than  standanl. 

1.5.  Freight  rate  increases  from  19 JO  to  Wm.—The 


170 


INLAND  TRAFFIC 


cleoision  of  the  Boart'  in  191(}  in  the  Eastern  Rates 
Case  granted  increases  in  freight  rates  east  of  Poit 
Arthur  which  may  be  taken  as  averaging  in  general 
five  per  cent. 

In  1917,  the  Canadian  railways  made  application 
in  the  so-called  Fifteen  Per  Cent  Case  for  an  in- 
crease in  freight  and  passenger  rates.  In  so  doing, 
they  urged  as  their  justification  the  large  increase  hi 
operating  costs  which  had  taken  place.  In  Eastern 
territory  a  freight  rate  increase  of  1,5  per  cent  was 
allowed. 

In  Western  territory,  the  maximum  level  of  rates 

was  held  down  by  the  Crow's  Xest  Pass  agreement. 

Under  the  subsidy  arrangement  already  referred  to. 

in  return  for  which  the  Canadian  Pacific  built  tht" 

Crow's  Xest  Pass  line,  provision  was  made  wherein 

the  Company  undertook  to  make  speciHed  reduction's 

on  specified  commodities  varying  from  10  per  cent 

to  SSVs  per  cent  from  the  rates  existing  at  the  time 

of  the  agreement.     In  addition,  fiat  rate  decrease- 

on  grain  and  flour,  both  to  the  head  of  the  Lakes  a!i.J 

East  thereof,  were  provided.     These  reductions  from 

the  rates  then  existing  established  statutory  maximum 

rates,  which,  in  view  of  their  embodiment  in  speci.il 

legislation,  the  Board  had  no  power  to  interfere  with. 

Accorchngly,  the  increases  in  the  West  whic  i    weir 

allowed  were  subject  to  the  provisions  of  the  .  gre( - 

ment.     The  result  is  that  the  increases  in  the  West 

averaged  about   10  per  cent.     This,  in  coniuncti(f! 

with  the  earlier  increase  in  the  Eastern  Rates  Case, 


PHASES  OF  HATES  AN,,  taKIFI-s         „, 

■iHled  in  ksseninir  tlie  si„-,.„i  i   . 

>>'><i  \\'ester„  -.tt  '        '  '"'^'"'"'  ""^  '•'■'stern 

-'"Ption  of  „,e  «an  e  s  al  f'o  ;  "  '."■"'■''  '"'  '"  "«-■ 
I'loyee.  At  tla.  «J.,etn.'  ,.:""'"  ''"""">■  ""■ 
materials  attribuf.l.le  t  '"'•'•easms  e,«t.s  „f 

^tantiy  in  evidence  "'■  '""''"'""^  »--  «'■- 

Aetof  theDo:.:rSare:t''";;r  "•^-  ■'^"-■'" 

't  was  represented  that  an  rcre  se  of         """"^  """'• 
-'■->  per  eent  in  existing  freiXnt       '•PP'''""""'Hv 
order  to  meet  the  inereled  otts      I  T"'  ""'''""''  '"'    ' 
".gly  taken  by  the  Governo    ;„  ^'"""r'  """"'- 
provisions  of  the  W.r  Arlf.  ."''''  ""'''^'-  "'« 

"f  which  pern,  ttcd  tl,;";.'^'*'  *'"^  "'''^  P"wers 
"f  the  Specill  Ac,  "^"-■"''"S  of  the  provisions 

wa!;?opt:d^„'c:::d'  ""':'  ''"•^-  ^^"'-  ""«•  *'- 

'■'-  as  t^o  spe::;ic'r:;d:ti  f  itr'f  ■""""'- 

nites  which  the  MoA,u         ,      .  "  "'  "'<^^'-fase< 

'"  the  United  StS;^"  ""'"  '""'  "'•'"''^  "I'-^fve 

Where  in  contiguous  Umt^,!  «t  .     .      • 
''••"i  not  been  an  antece,Ie„  '  *""'"'>'  '^'"^ 

granted  under  the  K  ftc tp  "TT  r'"''"  '"  *''-^' 
^"crease  was  eliminated  fron  the  Ca        "'''  "'™  ""'^ 

"-••-osa.inwester„7:rd^;r:i;:;tt 


mi 


172 


INLAND  TUAFFIC 


no  siicli  increase  in  eonti^nious  Ignited  States  terri- 
tory, the  averaj^e  10  per  cent  increase  under  the  Fit- 
teen  Per  Cent  Case  was  eliminated  and  the  increas. 
was  apphed  on  the  antecedent  rate  basis.  The  result 
is  that  in  the  East  there  is  the  full  effect  of  the  i:> 
and  the  25  per  cent  increases,  while  in  the  West 
the  latter  alone  applied.  This  further  tended  to  les 
sen  the  s])read  betweeti  the  Kast  and  the  West.  len- 
der these  conditions,  the  average  increase  over  all  sec- 
tions was  approximately  20  ])er  cent. 

Effective  September  13,  1920,  freight  rates  in  tli. 
territory  east  of  Port  Arthur  were  increased  40  pt  i 
cent  and  west  thereof  25  ])er  cent.  On  January  1. 
1921  the  increases  were  reduced  to  35  per  cent  re- 
spectively and  on  December  1,  1921,  again  reduced  t<. 
25  and  20  per  cent  respectively.  Transcontinental 
rate  inc^'^   «;■""  were  reduced  to  23h  per  cent. 

16.  (  st  Pass  Agreement. — Under  order  in 

council  '  /  27,  1918,  the  Board  of  Railway  Com- 
missioners were  authorized  to  disrega! d  the  Crowsnt  st 
Pass  Agreement,  as  well  as  all  other  rate  controlliim 
agreements,  for  a  period  of  three  years  begiimiiij,' 
July  (),  1919.  The  Agreement,  except  as  to  rates  on 
grain  and  flour,  was  again  suspended  until  July  «•>. 
1924  by  an  order  in  council  dated  June  30,  1923. 

When  the  Agreement  again  became  effective  on 
July,  7,  1924,  the  roads,  interpreting  strictly,  limittd 
the  low  rates  to  points  on  lines  in  operation  in  18'.>7. 
After  lengthy  hearings,  the  Board  then  ordered  the 
roads  to  cancel  on  October  27  the  tariffs  made  efft  c- 


PHASES  OF  UAIKS  AND  TARIFFS    17.1 


tive  on  July  7  and  restore  tliose  in  effect  on  July  (5. 

The  dispute  was  then  referred  to  the  Supreme 
Court  which  decided  ( 1 )  that  the  Hoard  could  not  fix 
rates  higher  than  the  niaxinunn  provided  in  the 
Ajfreement  hut  that  (2)  the  Agreement  shouhl  ap- 
ply only  to  Canadian  Pacific  mileage  existing  in  1897. 

In  1925  an  iVct  of  Parliament  gave  to  the  Hoard 
fuil  control  of  all  railway  rates  in  the  Dominion,  thus 
nullifying  the  statutory  maxinrim  fixed  in  the  Agree- 
ment with  one  important  reserv^ition,  namely,  that 
the  low  east-bound  rates  on  grain  and  flour  should  he 
retained.  This  Act  will  enable  the  Commission 
gradually  to  eliminate  inequalities  in  existing  tariffs 
with  the  one  important  exception  noted. 

17.  Special  and  competitive  tariff's.— Special  and 
competitive  freight  tariffs  do  not  require  the  approval 
of  the  Board  before  becoming  operative.  They  come 
into  force  upon  filing  the  tariffs  with  the  Board.  A 
special  tariff  reducing  existing  rates  must  also  be  on 
file  for  three  days  before  the  effective  date  in  every 
station  or  office  of  the  company  where  freight  is  re- 
ceived, or  to  which  freight  is  carried  under  the  tariff' 
in  question.  In  the  case  of  increases  of  rates  thirty 
(lays'  public  notice  is  required.  Competitive  tariffs 
ace  not  under  any  obligation  as  to  pub''c  notice,  this 
matter  being  left  to  the  discretion  of  the  Board  to  fix 
Mich  regulations  as  it  may  deem  necessar\\ 

To  meet  temporary  emergency  conditions,  special 
late  notices  may,  without  publication,  be  issued  (juot- 
ites  on  specific  shipments  })etwccn  injints 


\v 


i:} 


174 


INLAND    TRAFFIC 


n 


on  the  railway  which  are  not  competitive.  It  is  pro- 
vided that  the  railway  may  issue  these  rate  notices  jii 
its  discretion,  to  help  create  trade  or  to  develop  the 
business  of  the  company,  if  it  he  in  the  public  in- 
terest and  not  otherwise  contrary  to  the  provision- 
of  law.  The  special  rate  notice  has  to  be  filed  witli 
the  Board,  and  is  operative  only  for  a  specific 
shipment.  It  nmst  also  specify  the  reason  for  issu- 
ance and  the  rate  which  would  otherwise  have  been 
effective. 

In  practice,  the  railways  have  been  permitted 
under  this  provision  to  provide  for  the  prompt  ihip- 
ment  of  any  freight  which  may  unexpectedly  be  of- 
fered and  for  which  no  suitable  tariffs  have  been  j)rt- 
pared,  there  being  the  condition  that  the  filing  and 
publication  of  the  tariffs  shall  be  immediately  pro- 
ceeded with.  Such  special  notices  may  also  cover  tlu' 
disposition  of  a  shipment  which  has  been  forwarded 
to  a  wrong  destination,  or  which  may  have  been  re- 
fused by  the  consi  ee.  Small  sample  shipments, 
for  example,  of  ore.  may  be  carried  under  such  notice 
for  testing  purposes,  actual  weight  at  carload  '"ate 
applying. 

Formerly  such  a  notice  might  cover  the  removal  <>f 
live  stock  by  rail  from  exhausted  grazing  grounds  to 
new  pastures  on  the  ranches  of  the  Xorthwest  for  sul)- 
sequent  reshipment  to  the  markets.  With  the  chan^'c 
in  agricultural  conditions  the  need  for  this  has  passed. 
The  railways  are  also  permitted  under  such  an  ai- 


v":  'jf^hm. 


t.'StiifsSi^ 


PHASES  OF  HATKS  AND  TARIFFS         17/j 


rangement  to  carry  fuel  for  their  employes  at  reduced 
rates. 

18.  Tranacontwcntal  rntvH.—\y\m\  the  Canadian 
Pacific  entered  the  field  of  thru  traffic  at  the  I'aciHc 
coast  it  adopted  in  a  general  way  the  system  as  to 
terminal  points  which  it  found  in  use  on  the  American 
railways  to  the  south.     These  had  ',een  affected  h" 
various  rate  adjustments  in  which  the  competition  hy 
way  of  the  Isthmus  of  Panama  and  C\ipe  Horn  hail 
played  an  important  part.    The  movement  hy  way  of 
Cape  Horn  is.  so  far  as  the  movement  fror.  the  east- 
ern to  the  western  coast  of  Xorth  xVmerica  is  con- 
cerned, of  diminishin/nr  importance.     Since   1900.  a 
few  chartered  sailing  vessels  have  eacli  year  carried 
cargoes  around  the  Horn.     The  Panama   Railway 
lias  heen  overshadowed  in  puhlic  interest  hy  the  Pan- 
:ima    Canal.     But    the    railway    has    heen    an    im- 
portant factor.     Bt  fort-  it  becan'c  the  pro,)erty  of 
Ww  United   States  C  xrrn^  ,rnt.  the   United   States 
railways  had  been  ahif-  to  i,    ke  it  simply  a  differential 
rate  route.     The  route  ly  «  ly  (»f  the  railway  across 
the  Isthmus  of  Tehuar.t'  .  in   importance,  and 

uill  become  more  so  in  th  u  c     With  settled  in- 

ternal  conditions   in   ^\v\u      ,t    will   cease   to   be  ,i 
negligible  factor. 

19.  Tranticouthenial  tariff  ,rc  filed  %  Canadian 
I'rcighf  Association. — Form*  r  *he  tf- ins<'.ntinental 
tariff,  covering  the  movement  h\y,u  *'-»s'u  rn  Canada  to 
British  Columbia  coast-points,  wn  '  h     m   Vmeri- 


176 


INLANJ)  THAI  KK 


I 


can  aK^-nt  uftiti^'  for  both  tlic  Caiuuliafi  and  tlu 
riiilt'd  States  roads  com-criiid.  Since  ScpteiidKr. 
]\n{),  tlK'  tariff  is  Hk-d  on  iKhalf  ot*  the  Canadian 
Freight  Association,  hy  tlic  C'liairinan  't*  tliat  As- 
sociation. 

20.  IIoic  rates  arc  r/z/o/cr/.— The  rates  (inoted  in 
the  tariff'  are  from  specified  rate  points  in  eastern 
Cana(hi,  which  rate  poifits  give  the  rates  for  the  re- 
spective groups  to  seventy  Hritisli  Cohiinhia  Pacific- 
coast  points,  or  terminal  points;  to  seventeen  points 
which  take  rates  made  up  hy  adding  arhitraries  of 
5  cents  per  100  Ihs.  C.  L.  and  10  cents  L.  C.  L.  to 
the  rates  to  Pacific  coast  points,  and  to  one  point 
which  has  arhitraries  of  7Vi»  and  1.3  cents. 

21.  Water  corn  petition  govern  .s  rat  cm  to  terminal 
points. — Rates  to  the  tertninal  points  are  made  on  the 
hasis  of  water  competition.  In  April,  191.),  u\- 
aimo,  on  Vancouver  Island,  was  taken  out  r)f  the  ter- 
minal point  list,  its  rates  thereafter  heing  1  jilt  up  hy 
the  addition  of  the  arhitraries  ahoe  indicau-d.  Vie 
toria  and  Esquimalt  remained  as  tern.inal  ])oints.  In 
justifying  the  difference  in  treatment  the  railway 
said  that  the  rates  from  Eastern  Canada  to  the  tc 
minal  iK)ints  were  made  to  meet  water  competition, 
that  the  competition  at  Xanaimo  difiered  from  that  nt 
V'-'toria  and  Vancouver;  there  were  no  direct  sailings 
from  Panama  to  Xanumo. 

22.  Basing  point  changed  on  transcontinental  class 
rates --Vormcrly  the  rates  charged  from  Eastern 
Canada  on  transcontinental  freight  were  based  upon 


rilASr.S  OF  UATKS  AM)  TAHI.  IS  177 


the  rates  dmrov.l  |,y  Ainciican  railways  on  ti;m  ..n- 
lim-iilal  trallic  .ri«ir".ii,,.r  at  C"liif:i«n.  W'hili  tli. 
tratlif  «»ri;4i I la tiller  j  ,•^^^.  eastt-rii  Statt-s  is  sul-jcrt  t(. 
kirn  watt-r  c'«.ni|H'titi(.ii,  the  wattr  (•oiniutiti«.i.  in 
Kastirn  Canada  is  niucli  Irss  active.  The  elass  traffie 
oritfinatinor  at  C'liiejii-o  is  also  less  iiiMueneed  hy  water 
(•('  etition.  The  similarity  in  respeet  of  lessened 
vv  eornpetiti(»n  was  considered  hy  the  ra'ways  as 

a  justiHeation  tor  ChieaKo's  hein^r  taken  as  a  hasir;^- 
point.  'I'o  the  elass  rates  from  C'hiea^ro  were  added 
certain  arhitraries,  or  rates  not  proportioned  to  dis- 
tance, to  cover  the  han  east  thereof  from  points  in 
Kastern  Canada.  For  example,  these  arhitraries 
were  classed  as  follows  in  cents  per  hmidred  ponnds, 
ill  the  case  of  the  movement  from  Montreal  or 
Toronto: 


<  liiss      1  2  ;{  4 

-^)       IH       1.-,        i:{ 


.» 

10 


The  class  rates  to  liritish  Colnmhia  are  no  lon^rer 
arrived  at  in  this  way.  The  rate  from  the  Toroi^.)- 
Montreal  gronp  is  the  hasin^  ra'e,  juid  other  points 
east  exceed  this  rate  hy  certain  arhitraries.  The 
Canadian  Pacific  estahlished  the  rate  from  this  i-roup 
it  .%S.(;2,  first  elass,  an  increase  of  2  cents  per  100 
l"nmds  over  the  hitherto  existing-  transcontinental 
late.  The  other  classes,  however,  are  scaled  on  the 
Canadian  Class"  ication  with  resulting-  lower  rates 
tlian  under  the  Western  Classification  which  applies 
in.m  Chica^ro.  The  result  is  that  while  frf)nj  the 
I'nronto-Montreal  ^roup  the  first-class  is  increased  2 


M:^ 

5. 

h    ■ 

178 


INLAND   TRAFFIC 


I 
i 


cents,  the  other  classes  are  reduced  in  cents  per  100 
pounds  as  follows : 


Class. 


i 
16 


3 

28 


4 

26 


27 


6 
4U 


7 
37 


8 
20 


10 


23.  Group  system  used  for  quoting. —  A  grouping 
system  is  used  in  quoting  the  rates;  and  in  the  above 
rearrangement  the  groups  east  of  Montreal  have  been 
made  smaller.  In  this  way,  the  arbitraries  over  the 
Toronto-Montreal  group  have  been  increased.  But 
aside  from  the  first-class  rate,  there  has  been  a  general 
reduction  in  the  class  rates. 

The  rates  in  cents  per  hundred  pounds  from  the 
various  groups  to  Vancouver  are: 

Group     •  1234.56789 


10 


} 


580  i 

474 

373 

298 

253 

232 

179 

160  .. 

..  159 

584 

477. \ 

375 

299  \ 

254 

233 

181 

162  .. 

..  160 

58T.\ 

479 

376'. 

301  \ 

256J 

235 

181 

162  . . 

. .  162 

591 

484  .V 

380 

304'. 

258  ,\ 

236 

182 

163  .. 

..  162 

594 

486* 

383 

306ik 

260 

238  .\ 

184 

165   .. 

..  163 

60U 

493 

389  \ 

309 ; 

263 

242 

188 

169  .. 

..  167 

608  \ 

497  \ 

394 

315 

266  \ 

245 

191 

170  .. 

..  170 

61U 

502 

395.^ 

317 

268  \ 

247.1 

192 

172  . . 

.  .  172 

615 

505 

399 

318 

270 

248  i 

1941 

173  .. 

..  173 

62  U 

510 

4041 

324 

2U 

2,>2 

198 

175\  .. 

.  .  1  r.) 

628J 

516i 

409  ^ 

327 

277. \ 

253.\ 

199* 

179  .. 

..  ITf) 

Toronto   

Montreal    

St.  Constant  

St.   Hyacintlie   . . 

Stanb  ridge    

Sherbrookc    

Quebec    

Riviere  du  Loup 

Mont  .loH    

St.  John    

Halifax     

Miilfrravc   

Sydney    

The  ninth  class,  as  it  co\ers  live  stock,  is  not  given. 

The  class  rates  from  the  groups  in  question  to  Van- 
couver are  built  up  by  adding  to  the  class  rates  from 
Fort  William-Port  Arthur  to  Vancouver,  arbitra- 
ries covering  the  eastern  group  of  origin.  For  ex- 
ample, the  following  shows  for  three  classes  the  class 
rates  and  the  arbitraries  from  the  Sydney  group  to 
Vancouver. 


PHASES  OF  RATES  AND  TARIFFS 


179 


Class  1  Class  2  Class  3 

Cl.iss  rate  from  Fort   William 431  191  110 

Arhitrary  east  of  Fort  William 197§  86J  69 

Under  the  rate  increases  allowed  in  September, 
1920,  a  40  per  cent  increase  in  freight  rates  was  al- 
lowed east  of  Fort  William  and  35  per  cent  west 
thereof.  After  December  1,  1921,  the  respective 
percentages  were  reduced  to  25  per  cent  and  20  per 
cent,  and  were  as  above  given. 

As  the  rate  is  made  on  Fort  William,  the  respective 
percentages  apply  on  the  component  portions.  That 
is  to  say,  on  the  arbitrary  east  of  Fort  William  the 
eastern  percentage  of  increase  applies,  while  on  the 
class  rate  west  of  Fort  William  the  western  percent- 
age applies. 

24.  Differential  lake-and-rail  routes.  —  During 
lake  navigation  differential  lake-and-rail  routes  are 
granted  the  Montreal-Toronto  group  to  Vancouver. 
They  are,  including  insurance : 


All  rail    ...... 

I. like  and  rail 


1         2         3         4         .5         6         7         8         9         10 
5701  4()5     HMh  2901  248     226     I'M   l.Ui    ...      154\ 
545 A  445     350 Ji  280 i  242     221     UiH\   149i    ...      149 i 


DiflFerence   25      20      14      10 


6 


These  rates  apply  not  only  to  the  coast  but  are  also 
a  maximum  to  intermediate  points;  the  intermediate 
rates  are  scaled  down.  The  lake-and-rail  class  rates 
from  the  initial  group  to  Vancouver,  and  to  inter- 
mediate points  as  well,  are  made  by  adding,  in  each 
case,  to  the  lake-and-rail  rate  from  the  initial  group 
to  Port  Arthur,  the  rail  rate  from  Port  Arthur  to  the 


180 


INLAND    TRAFFIC 


point  beyond.  The  rate  is  thus  a  combination  giving  the 
advantage  of  the  water  competition  to  points  beyond. 
The  local  lake-and-rail  rate  from  Toronto  to  Port 
Arthur  is  on  a  lower  basis  than  from  ^lontreal.  The 
all-rail  rates  from  Montreal  and  Toronto  are  on  the 
same  basis.     The  following  tables  set  out  the  rates: 


From 

Montreal 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

All-rail 

.  ino^ 

KJO 

13H 

9'>\ 

79 

(i(U 

()()'. 

G5 

05 

Lake-and-rail     . . . 

125  i 

1091 

9J3 

81  i 

«3 

03 

43 

43 

43 

V  roiii 

Toronta 

All-rail 

.    199', 

IGO 

131  \ 

9:,\ 

79 

6«J 

(,G\ 

05 

65 

l,akf-an 

d-rail    .... 

.    lUi 

9Jl 

8U 

m 

54 

50 

39i 

39  i 

39 

The  rates  on  the  thru  movement  via  lake-and-rail 
from  Eastern  to  Western  Canada  beyond  Port  Ar- 
thur are  the  same  from  both  Montreal  and  Toronto. 

25.  Commoditi/  traffic  easthouml,  important.— 1\\ 
the  case  of  lake  and  rail  rates  from  Fort  William - 
Port  Arthur  to  eastern  Canada,  the  railways,  in  filing 
tariffs  under  the  1920  judgment,  have  in  the  case  of 
grain  and  grain  products  retained  the  5  cent  differ- 
ential. On  traffic  eastbound  from  British  Columbia 
to  Eastern  Canada,  class  rates  are  built  on  the  same 
general  system  as  for  westbound  traffic.  Practicalh 
all  the  movement  is  on  commodity  tariffs. 

REVIEW 

Wliat  now  scales  wert'  adoptcfl  as  a  result  of  the  Westen 
Hate  Case  He«'isi<)n? 

What  regulations  <iovern  standard  an<i  eompetilive  tariffs? 

How  are  transcontinental  rates  fixed.^  What  change  in  tlu 
basing  point  was  nia<le? 


■■.t.»*T*w'C*t.»'  TI" 


-)[.««irfw,  oi»-45^    mcsim- 


C  HAPTER  XI 


TOWN  TAKIll'S,  EXPORT  AND  IMPORT  RATES 


1.  Disirihiitirc  rates. — In  the  early  days  in  Ontario 
tlie  Grand  Trunk,  competing-  with  the  Great  Western 
and  its  connecting  boat  lines,  put  hi  competitive  rates 
to  common  (that  is,  competitive)  points.  In  the 
handling  of  merchandise,  the  establishment  of  jobbing 
or  distributing  points  naturally  develops.  The  rail- 
nays  have  shown  recognition  in  their  rates  of  such 
points.  \\'hile  a  (piestion  may  be  raised  as  to  what 
extent  it  is  justifiable  to  grant  a  distinction  in  rate 
between  a  place  which  has  so  established  a  distributing 
l)usiness  and  one  which  has  not.  the  railways  have, in 
granting  such  rates,recognized  that  they  have  not  only 
tiie  carload  business  in,  but  also  the  distributive  busi- 
ness out,  normally  in  less-than-carloads. 

Distributive  tariffs  are  of  such  a  nature  that  the 
railways  are  constantly  faced  with  demands  for  re- 
adjustments.  A  new  jol)l)ing  center  may  develop. 
It  naturally  desires,  when  distributive  rates  are  in 
effect,  that  it  shouhl  have  such  rates.  But  distributive 
rates  and  the  recognition  of  distributive  Areas  tribu- 
tary to  certain  centers  arc  like  a  pair  of  scales.  Any- 
tliing  that  affects  one  scale  affects  the  level  of  the 
'.then  thus  one  change  may  lead  to  the  demand  for  an- 
other. 

181 


^>SE3Ei 


182 


INLAND  TRAFFIC 


3 


The  tariffs  given  to  distributing  points  are  known 
as  "town  tariffs."  The  various  points  so  treated  may 
be  either  distributing  or  manufacturing  centers.  In 
effect,  they  may  be  regarded  as  rate-basing  points. 
The  town  tariffs  in  Ontario  and  east  to  Montreal 
were  readjusted  by  the  order  of  the  Board  in  the  In- 
ternational Rate  Case  which  was  decided  in  1907. 

2.  International  Rate  Case. — It  had  long  been  a 
source  of  complaint  that  the  rates  eastward  to  Mont- 
real exceeded  those  westward  from  Montreal.  Ap- 
plication was  made  by  the  Toronto  Board  of  Trade 
that  this  discrepancy  be  removed.  It  developed  that 
in  order  to  deal  properly  with  the  matter  it  was  neces- 
sary to  have  a  general  rt^arrangement  of  the  class  rates 
between  all  points.  Coupled  with  this  complaint  Mas 
a  further  complaint  as  to  international  rates  on  the 
ground  that  the  rates  from  Detroit  were  lower  than 
the  rates  from  Windsor,  just  east  across  the  river.  It 
was  recognized  that  the  reduction  of  the  rate  from 
Windsor  would  necessitate  the  scaling  down  of  rates 
to  intermediate  points.  So  the  question  of  the  com- 
plaint advanced  by  the  Toronto  Board  of  Trade  as  to 
Montreal  rates  westbound  versus  Toronto  rates  east- 
bt)und  became  interrelated  with  the  complaint  of  thf 
Canadian  ^Manufacturers'  Association  as  to  interna- 
tional rates. 

The  traffic  from  the  Detroit  River  was  affected  by 
both  th^  Official  and  the  Canadian  Classification.  It 
was  impossible  to  harmonize  these,  as  they  are  built 
up  in  a  different  manner.     The  existing  first-class 


."-^m. 


TARIFFS  AND  RATES 


183 


a 


rate  was  taken  from  Detroit  and  the  rates  from  Cana- 
dian points  eastward  were  scaled  down  accordingly. 
It  was  then  directed  that  the  rates  from  Canadian 
|)oints  on  the  Detroit  and  St.  Clair  River  frontier  to 
all  points  east  to  the  Atlantic  and  north  to  the  Ottawa 
Uiver  should  in  no  case  exceed  the  rates  from  Detroit 
and  Port  Huron. 

Directicm  was  given  that  the  town  tariffs,  then  in 
existence,  be  reduced  so  as  to  place  them  all  on  the 
same  mileage  scale.  The  scale  directed  to  be  adopted 
covered  up  to  5f)0  miles  and  is  commonly  known  as 
Schedule  A.     It  may  be  summarized  as  follows: 

(1)  Up  to       5  miles,  8  cents  per  100  lbs.  1st  class. 

(2)  6  to  20  miles,  2  cents  increase  for  each  5-mile  step 
(-'J)  21  to  80  miles,  2  cents  increase  for  each  lO-mile  step 
(4)  81  to  110  miles,  2  cents  increase  for  each  15-miIe  step 
(o)  111  to  200  miles,  2  cents  increase  for  each  20-niile  step 
(6)  201  to  440  miles,  2  cents  increase  for  each  30-milc  step 
(T)  441  to  5()0  miles,  2  cents  increase  for  each  40-mile  step 

It  was  found  necessary  in  making  this  rearrange- 
ment to  re-group  the  existing  rate  points.  The  mile- 
age ovided  for  in  the  scale  covered  as  far  as  Mont- 
real. Beyond  ^Montreal  to  Quebec  the  thru  rates 
from  the  territory  between  Win<lsor  and  Toronto  and 
from  the  northern  portion  of  the  westerly  peninsula 
<'f  Ontario  were  to  be  built  up  by  the  addition  of 
aihitraries. 

The  readjustment  thus  brought  about  repre..  tit 
roughly  a  reduction  of  25  per  cent  from  the  standi r'. 
rates  up  to  500  miles.     The  effect  of  the  r 


0^^ 


i  !i- 


184. 


INLAND  TRAFFIC 


went  further,  it  was  not  limited  to  the  town  taritt 
poifits  alone.  From  and  to  in*:ermediate  points  the 
town  tariti'  applies  nntil  the  standard  tariit'  l)c'eonle^ 
lower. 

3.  Jiate  read  J  list  m  en  t  aud  (jroup  rcarrauijcmcut.- 
r.uler  the  Eastern  Hates  Judgment  of  the  Hoard  in 
11)1(),  a  readjustment  of  these  rates  was  autiiori/x'd. 
It  was  found  justitiahle  to  inerease  rates  2  eents  per 
100  pounds  on  first  elass,  the  remaining  elasses  to  Ik 
sealed  in  aeeordanee  with  the  relation  hetween  tlu 
.standard  elass  rates.  There  was  the  further  proviso 
that  no  rates  of  anv  railway  system  whieh  are  already 
ecjual  to  those  thus  ])ermitted  were  to  he  inereased. 
and  that  if  tliey  were  already  higher  they  were  to  he 
redueed  aeeordingly.  A  rearrangement  of  groups 
was  also  made  as  follows: 

Group  81 —  95  miles  changed  to  81 — 100  miles 
Grou])  96 — 110  miles  changed  to  101 — U-iO  miles 
Group  111 — 140  miles  changed  to  IfM-UO  miles 

The  effi  't  of  this  change  was  to  deny  an  inerease  for 
distances  l)(>-100  and  111-120  miles  of  the  scale. 

4.  Totcn  tariff H  in  the  East. — East  of  Montreal  in 
the  Proyince  of  Quehec  and  in  New  Hrunswick  and 
Nova  Scotia  town  tariffs  also  exist.  These  caniKit 
he  expressed  in  terms  of  any  general  percentage  <-!' 
the  standard  tariff. 

In  the  westward  movement  from  eastern  Canada  ti 
the  Northwest  there  is  not  only  the  all-rail  movement, 
hut  also  the  lake-and-rail  movement,  which  is  on  a 


TARIFFS  AND  KATES 


;s5 


low  basis  to  meet  tlie  lake  eoinpetitioii.  (JockIs  may 
he  carried  all-rail  or  l)y  lake-aiul-rail,  or  between  eer- 
tain  points  by  all-water.  For  example,  prior  to  tlie 
rate  increases  of  1910  to  11)18,  tlie  all-rail  rate,  tilth 
class  from  London  to  Sault  Ste.  Marie  was  .'i.j  cents. 
By  lake-and-rail,  it  was  2.5  cents.  In  the  movement 
hy  water  of  independent  water  carriers,  Sault  Ste. 
Marie  and  Fort  William  were  blanketed  on  bar  iron 
and  other  iron  and  steel  commodities  with  the  rate  of 
17|  cents.  The  railways  met  this  competition  by 
(juotin^  a  lake-and-rail  commodity-rate  of  19|  cents 
to  the  same  points. 

While  on  the  lake-and-rail  movement  thru  rates  ai*e 
worked  out  by  the  railways  and  their  connecting  water 
carriers,  the  independent  boat  lines — for  example,  the 
Inland  IJnes,  the  Canadian  Lake  Line,  and  the  Mer- 
chants' Mutual — do  not  make  joint  rates  with  the 
railways.  They  base  on  the  same  rates  from  Fort- 
William  or  Port  Arthur  as  the  lake-and-rail  lines  do 
on  tiaffic  beyond.  While,  of  course,  from  Deceml)er 
to  the  end  of  April  the  lake  route  is  closed,  it  is  con- 
tended by  the  railways  that  its  competitive  effect  is 
l)ervasive  thruout  the  year.  For  goods  can  be  and 
are  shipped  forward  during  the  navigation  season  to 
the  head  of  the  Lakes,  where  they  are  warehoused  and 
shipped  out  froiu  time  to  time  during  the  winte?-. 

'y.  Some  objections  overcome. — When  distril)utini^ 
husiness  developed  in  Winnipeg,  Eastern  Canada 
complained  of  competition.  Take  a  point,  say,  100 
miles  west  of  Winnipeg,  and  the  situation  arose  that 


^j-'VV."  *ry 


186 


INLAND  TRAFFIC 


the  thru  rate  on  a  carload  of  groceries  from  Hamilton 
to  this  point  would  be  less  than  the  conibination  of  thi 
rate  from  Hamilton  to  Winni})eg,  and  the  local  out. 
As  an  outcome  of  much  discussion  and  agitation, 
Winnipeg  was  given  the  "traders'  tariff"  arrange- 
ment. I'ndci  this  tariff,  merchandise,  when  shipped 
ifito  Winnipeg  from  an  eastern  point  and  warehoused, 
paid  the  balance  of  the  thru  rate  from  Wirmipeg  on 
being  shipped  out.  That  is  to  say,  to  a  point  100 
miles  l)eyond  it  would  get  the  same  rate  trea*^!nent  as 
if  the  shipment  had  moved  direct  from,  say,  Hamilton 
to  a  point  100  miles  bey(md.  There  had,  however,  to 
be  paid  in  connection  with  the  stopo\er  the  cartage 
and  handling  charges.  These  averaged  8  cents  per 
100  pounds  on  the  first  four  classes  and  6  cents  on  the 
fifth  class.  Under  this  arrangement  95  per  cent  of 
the  freight  west-bound  from  Winnipeg  moved  on  this 
tariff.  Subsequently,  Brandon,  Regina  and  Calgar\ 
were  given  the  same  arrangement.  In  1907,  this 
tariff  arrangement  was  found  by  the  Board  to  be  dis- 
criminatory, since  it  was  limited  to  certain  places, 
consignors  and  consignees. 

6.  Toxvn  tariff  si/Htem  related  to  rate  reductions. — 
The  town  tariff  or  distributing  tariff  system  as  it 
developed  in  the  West  is  related  to  various  reductions 
in  rates  which  took  j)lace  from  time  to  time. 

By  the  Crow's  Nest  Pass  agreement  of  1898,  re- 
ductions were  made  by  the  Canadian  Pacific  in  cois 
sideration  of  a  subsidy.     On  the  thirteen  classes  of 
merchandise  mentioned  in  the  legislation,  reductions 


TARIFFS  AND  RATES 


187 


of  10  per  cent  were  inude  on  ele\  eti  classes,  -JO  per  cent 
on  coal  oil  and  33.^  per  cent  on  «» reen  and  fresh  fruits. 
The  Act  also  called  for  a  redact 'on  of  3  cents  per  100 
Ihs.  on  ^rrain  and  Hour  rates.  As  a  result,  the  grain 
rate  was  reduced  in  Septeniher,  1899,  to  14  cents  on 
the  haul  from  Winnipeg  to  Fort  William.  The 
agreement  hetween  the  Manitoha  government  and  the 
Canadian  Northern  has  already  heen  referred  to.  As 
u  result  of  the  agreemeiil,  the  1-t-cent  rate  on  grain 
from  Winnipeg  to  Port  Arthur  and  Fort  William 
became  10  cents,  and  reductions  approximating  15  per 
cent  of  the  tariff  rates  on  all  other  freight  were  made. 
The  Canadian  Northern  having  made  this  reduction, 
it  was  met  in  Manitoba  by  the  Canadian  Pacific,  the 
rates  in  general  thus  becoming  85  per  cent  of  those 
hitherto  existing.  The  Canadian  Pacific,  of  its  own 
volition,  made  a  reducti(m  of  7h  per  cent  in  the  rates 
in  Saskatchewan  and  Alberta.  Scaling,  as  they  do, 
15  per  cent  off  the  standard  so  reduced,  town  tariff's 
in  Manitoba  were  reduced  to  70  per  cent  of  the  stand- 
ard and  in  Saskatchewan  and  Alberta  to  77^  per 
cent.  Under  the  15  per  cent  case  the  grain  and  grain 
products  rate  to  the  head  of  the  l^akes  had  been 
increased  by  2  cents.  Under  the  25  per  cent  order 
there  was  allowed  an  increase  similar  to  that  allowed 
in  the  McAdoo  order  with  a  maximum  increase  of  6 
cents  over  the  rate  existing  prior  to  the  15  per  cent 
uiorease. 

7.  Western  Rates  Case  cause^    tariff"  rearrange- 
ment.— By  the  judgment  in  the  W^estern  Rate  Case, 


i 


wmm 


188 


INLAND  TRAFFIC 


the  following  reanangtiiients  of  the  town  tariffs  wen 
directed: 

(1)  From  rccogiii/id  distrihuti  •  points  in  rrairic  tir 
ritorv  ^vst  of  Forf  Williani  to  points  within  tin-  xunie  turn 
torv  wo.-.t  of  Fort  Williuni,  tin  tir>t-cla.ss  rati-s  >litill  not  Ix 
more  than  85  j)i'r  ciiit  of  t\  v  tirst-dass  rates  in  the  I'rairii 
Standard  tariff". 

(2)  Fnmi    recognized    mainhind   distributing    centers    in 
Hritish   Columbia,   other   than    Vancouver   and    New    West 
minster,   to   mainland    points    in    Pacific    territory,    all-rail 
or  part  rail  and  part  inland  waters,  also  from  the  said  dis 
tributing  centers    to    points    in   Prairie   territory    and   ri<  < 
versa,  the  first  cla:  s  rates  shall  not  be  greater  than  the  first 
class  rates  in  the  Pacific  Standard  rate  less  15  per  cent  of 
the  Prairie  Standard. 

Thus,  in  the  Prairie  Provinces,  the  town  tariff's 
are  uniformly  15  per  cent  below  the  Standard  rates. 
In  the  case  of  British  Columbia,  the  percentages  ot 
reductions  vary. 

Subject  to  the  effect  of  the  Crow's  Nest  Pass  agree- 
ment the  15  per  cent  increase  applied  to  the  town  tariff 
rates.     The  25  per  cent  increase  also  applied. 

8.  Tort'/?  tariff  points. — The  following  list  sets  out 
practically  all  the  town  tariff'  points  in  Canada: 

Nova  Scotia  axu  Nkw  Bkixswick 


Woodstock,  N.  B. 
F'redericton,  N.   B. 
Campbellton,  N.  B 
Edmund^'         \.   B. 

QUEBF.C 

Montreal  and  its  grouped  St.  Hyacmthe. 

terminals.  St.  Rosalie  Junction. 


Halifax,  N.  S. 
St.  .John,  X.  B. 
West  St.  John,  N.  B. 
St.  Steuhen,  N.   li. 


ia«c-'^"»  -i:«jnf 


TARIFFS  AM)  HATKS 


189 


l.Hchine. 
Doininiun. 
St.  Johns. 
IlKrville. 

Aurora. 

Hurriv. 

Hilli'viUc. 

Hcrlin, 

Bow  man  villi'. 

t  ollii       jod. 

(  o  -nHall. 

Dtpot  Harl><>ur. 

Dt'scronto. 

Doon. 

Diindas. 

Elora. 

Fergus. 

Gait. 

(fHnanoque. 

Gui'lph. 

Hamilton. 

Ht'speler. 

Ingi'rsoll. 

Kingston. 

Lindsay. 

London. 

Moaford. 

Mrrritton. 

Mi.iland. 

Napanee. 

N«'Hniarket. 

Niagara  Falls. 

N"ith  Bay. 

Oriilia. 

Osliawa. 
Ottawa. 
Owen  Sound. 

XV  0—14 


Slit-rbrookf. 
Li'miiiwilK*. 
yufbtf. 

Ontario 

Brant  ford. 

Bridgfhurg. 

Brock  villi-. 

Cliatliam. 

Cobourg. 

Pfti-rboro. 

Pt'troliu. 

Port  DalhoM^ 

I*ort  Hoik 

Presc'ott. 

Preston. 

St.  Catharines. 

St.  Marjs. 

St.  Tlioniii  .. 

Sarnia. 

Stratfc 

Sudbur 

Sault  Sti.  Marl* 

Thorold. 

Toronto. 

Trenton. 

VValkerton. 

Waterloo. 

Welland. 

VVelland  Junction 

Whitby. 

W^iarton. 

Windsor. 

Wingham. 

Woodstock. 

Port  Arthur. 

Fort  William. 

Westford. 


'■^•i.wik'VL'  ~».s— -j»^a«3«(c;"*»''»'zi»»T":«»" 


190 


INLAND  TKAFFIC 


Parry  Sound. 
Paris. 


Winnipeg. 
St.  Boniface. 


Regina. 
Moose  .Jaw. 
Yorkton. 
Saskatoon. 

Calgary. 
Camrose 
Lethbridge. 

Fomie. 
C'ranbrook. 
Nelson. 
Rossland. 


Keiiora. 
Keewatin. 

Manitoha 

Hn  'ulon. 

Porhip'  la  Prairie, 

Saskatchkwax 

Battleford. 
North  Battleford. 
Prince  Albert. 
Wcyburn. 

Albkkta 

Stratheona. 
K<lmonton. 
Medicine  Hat. 

British  Columbia 

Revel  stoke. 
Westminster. 
Vancouver. 
Victoria. 


0.  Krport  and  import  rates  in  Canada. — On  the 
export  triuie  in  Canada's  staples,  there  comes  into 
operation  the  competition  of  markets.  ^VTiat  Can- 
ada's grain  can  pay  depends  ui)on  the  conditions  in 
the  world  market,  and  the  rate  must  he  adjusted 
with  reference  to  these  conditions.  Further,  the  rail 
portion  of  the  export  rate  is  concerned  only  with  a 
portion  of  the  total  haul,  while  in  the  case  of  the  local 
movement  it  has  no  movement  beyond.  It  lias  been 
ruled  by  various  regidative  bodies  that  a  division  of  a 
thru  rate  is  not  a  necessary  measure  of  the  reason- 


'^jiBMiKmiaarxA..^'  :3i^^A^A':. 


TARIFFS  AND  RATES 


191 


ableiiess  of  a  local  rate.     Similar  reasoning  is  applied 
t«»  export  rates. 

In  the  export  movement,  commodity  rates  are 
(jiioted  on  many  staple  articles.  For  ex.imple,  there 
are  export  commodity  rates  to  St.  John  on  cattle, 
sheep  and  hogs,  grain  ( all-rail ) ,  grain  ( lake-and-rail ) , 
apples,  pears,  lard  and  mred  meats.  From  Montreal, 
there  are  export  commodity  rates  on  the  same  articles 
and,  in  addition,  on  pine  and  larch  lumher. 

The  Board  has   recogmzed   that  there  is,  within 
reason,  a  justification  for  a  lower  basis  on  export  than 
on  domestic  business.     It  directed,  it)  11)10,  the  rein- 
statement at  Montreal  of  expoi-t  rates  on  lumber, 
lower  than  the  domestic  rates,     liy  an  order  of  1011, 
it  directed  an  extension  of  the  territory  from  which 
these  reduced  export  rates  on  lumber  should  apply. 
While  the  export  rates  via  Montreal  have  varied,  they 
have  generally  been  held  down  by  the  New  Vork  rates 
as  a  maximum.     It  was  recognized,  in  100.5,  that  the 
existing  practice  of  computing  export  rates  from  On- 
tario points  on  the  basis  of  percentages  of  the  existing 
export  rates  froiii  Chicago  to  New  York  was  not  un- 
I'.asonable,  and  a  direction  was  given  as  to  the  group- 
-ngs  and  percentages  that  should  apply  in  the  case  of 
all  export  traffic. 

10.  E^vport  traffic  on  Chicac/o-Xew  Vork  base— 
The  following  groups  are  arranged  in  percentages  of 
tlie  Xew  Vork  rate : 


192 


INLAND  TRAFFIC 


(1)   Toronto,  east  to  Kingston  and  Sharbot  Lake,  70  ptr 

cent. 
(JJ)   North  and  west   of  (iroup  1   to  St.    Thomas  and  Port 

Stanley,  73  per  cent. 

(3)  North  and  west  of  Group  Ji  to  the  St.  Clair  and  Detroit 

Rivers,  78  per  cent. 

(4)  North  and  west  of  Group  3  to  Teeswater  and  Win^ 

ham,  85^  per  cent. 

(5)  North  of  Grouj)  4  to  Wiarton,  Owen  Sound.  Kincar 

dine,  etc.,  85  per  cent. 

(6)  North  of   Elmsdale   to   and   including   North   Bay,   J)(» 

per  cent. 

It  was  provided  that  this  arrangement  was  to  cover 
all  export  traffic  including  grain  and  grain  products: 
and  the  revised  grouping  was  to  continue  as  long  as 
the  lines  operating  in  Ontario  found  it  expedient  and 
convenient  to  continue  the  existing  arrangement  of 
computing  export  rates  in  percentages  of  the  Chicago- 
Xew  York  rate. 

11.  Import  rate  anomalies. — While  import  traffic 
on  a  low  import  rate  basis  does  not  elicit  disapproval 
at  a  terminal  point,  say,  Vancouver,  anomalies  in 
connection  with  it  are  complained  of  at  interior  points. 
That  is  to  say,  if  a  merchant  at  Calgary  finds  that  tlR' 
rate  from  (rreat  Britain  is  lower  than  the  rate  from 
Montreal,  he  considers  that  he  is  being  discriminatKl 
against.  In  a  particular  case  the  rate  on  bar  iron 
from  Europe  to  Calgary  via  Vancouver  was  $1.2(;. 
At  the  same  time  the  lake-and-rail  rate  (all-rail  beiiiti 
higher),  from  Toronto  or  Montreal  to  Calgary  was 
$1.31.  The  anomaly  is  due  to  the  fact  that  the  ocean 
rate  to  Vancouver  was  '<i:n    per  100  lbs.  while  the 


TARIFFS  AND  RATES 


193 


rail  rate  from  Vancouver  to  Calgary  was  01  cents. 
If,  then,  the  railway  met  the  rate  combination  on  \'an- 
couver  where  water  comj)etition  existed,  an  anomaly 
would  be  created. 

Such  an  anomaly  may  exist  in  the  case  of  an  interior 
jM)int  like  Kamloops.  Heavy  crockery  packed  in 
straw,  in  basket  crates,  obtains  a  low  ocean  rate  i)c- 
cause,  since  it  packs  solidly,  it  is  really  paying  ballast. 
If  the  railway  makes  a  compelled  rate  to  Vancouver 
on  this  commodity  then  the  rate  to  Kandoops  will  be 
the  rate  to  the  Pacific  terminal,  plus  the  local  rate 
back  to  Kamloops.  To  Kandoops,  there  being  no 
water  competition  at  that  point,  the  rate  would 
roughly  be  proportionate  to  distance.  But  if  the 
rate  to  the  coast,  plus  the  local  back,  is  less  than  the 
straight  rate  to  Kamloops,  the  combination  on  Van- 
couver will  naturally  act  as  a  maximum  holding  down 
tlie  Kamloops  rate.  With  greater  efficiency  of  watei- 
tompetition  at  Vancouver,  the  effect  of  the  compelled 
rate  at  the  terminal  will  affect  the  rate  situation 
still  further  east  of  Vancouver. 

On  a  shipment  of  tea  from  Mojitreal  to  Vancouver 
ininplaint  was  made  that,  while  in  carloads  the  all-rail 
late  was  -$1.40  and  lake-and-rail  .$1.;W,  there  was  a 
lliru  import  rate  of  08  cents  from  British  ports  to 
\  ancouver. 

The  position  taken  by  the  Canadiaji  Pacific,  in 
explanation  of  this,  was  that  the  rate  all-water  from 
1-ondon  to  Vancouver  by  the  China-Mutual— the 
Blue  Funnel  Line— was  73  cents,  while  bv  wav  of 

•  « 


194 


INLAND    TRAFFIC 


the  Tehuantepec  Railway  it  was  76  cents.  Therefore, 
in  quoting  an  import  rate  of  98  cents  the  railway  con- 
tended that  taking  into  full  consideration  such  advan- 
tages as  it  had  over  the  all-water  route  in  point  ol 
dispatch,  it  could  not  charge  more  than  it  did  and 
get  any  share  of  the  import  business. 

12.  Influences  on  import  rates. — A  merchant  in 
London,  «  ntario,  may  complain  that  the  rail  rat*^  lit 
▼^ays  on  goods  from  Montreal  is  higher  than  the  rail 
ate  for  the  same  distance  when  the  goods  move  on 
an  import  rate.  The  import  rates  are  governed  b>- 
the  Official  Classification  and  the  local  rates  bv  the 
Canadian  Classification.  Consequently,  on  account 
of  differences  in  the  ratings,  comparisons  can  only 
be  made  in  the  higher  classes.  The  excess  of  the 
local  over  the  import  rates  on  the  first  six  Hasses  is 
as  follows: 

1  2  3  4  .5  6 


15.5 


10 


14- 


0  1  7.5 

The  railways  contend  that  the  import  rate  is  dt- 
r»endent  upon  the  conditions  of  traffic  by  way  of  tin 
various  North  American  ports.  The  adoption  of  tlic 
Official  Classification  is  an  evidence  of  this.  Tlic 
rates  thru,  say,  New  York,  are  affected  by  the  amount 
of  tonnage  offering  in  Europe  for  New  York  and 
the  greater  density  of  traffic  in  the  eastern  states. 
New  York,  it  is  urged,  is  more  favorably  situated 
from  the  standpoint  of  attracting  ocean  tonnage  than 
is  Montreal.     The  rate  fixed  by  way  of  New  York 


TARIFFS  AND  RATES 


195 


will  then,  it  is  contended,  fix  the  maximum  which  the 
sliipment  entering  by  ^lontreal  cannot  exceed.  On 
shipments  to  Ontario  points,  the  access  afforded  by 
I'nited  States  lines  sjjreads  into  Canada  the  effect 
of  the  United  States  import  rates. 

The  import  rate  being  thus  fixed,  the  railways 
further  contend  that,  if  on  account  of  the  lesser 
amount  of  ocean  tonnage  moving  to  Montreal,  the 
ocean  rate  to  that  point  is  higher  than  to  New  York, 
then  the  Canadian  railway  participating  in  the  im- 
{)ort  traffic  must  either  shrink  its  proportion  of  the 
inland  rate  or  forego  the  business  entirely.  In 
other  words,  it  is  contended  that  it  is  not  thru  any 
desire  to  discriminate  against  the  Canadian  domestic 
movement  that  the  lower  import  rate  basis  is  given, 
but  because  it  will  not  stand  any  higher  rate. 


■■  t'Tj 


REVIEW 

What  do  you  understand  by  distributive  rates?  What  is  an- 
other term  for  such  rates? 

What  factors  complicated  the  rate  situation  f;oni  Montreal? 

What  do  you  understand  by  a  standard  tariff? 

What  situation  in  Canada  corresponds  to  the  long-and-short 
Iiaul  difficulty  in  the  United  States?  How  was  this  situation 
Mttled? 

What  has  been  the  efJ'ect  of  special  export  and  import  rates 
Ml   the    United   States  on   Canadian  rates? 


.  rawr-v!  a  as*' 


iri- 


liir 


CHAPTER  XII 


INTERCHANGING   TRAI  TIC   AND   OTHER   SERVIC  KS 

1.  Transit  arrange  mentis, — In  the  tariffs  are  to  he 
found  arrangements  which  permit  the  raw  material 
to  be  worked  up  in  whole  or  in  part  before  the  rail- 
journey  is  completed.  The  Board  has  recognized  in 
the  case  of  sugar  beets  and  of  pulp  wood,  for  example, 
that  the  railway  may  take  into  consideration  in  fixiim 
the  rate  basis  inwards  on  crude  material,  that  it  carries 
out  the  finished  outcome  of  this  raw  material.  It 
may,  therefore,  adjust  its  rates  on  the  basis  of  a  con- 
tinuous service  instead  of  the  basis  of  two  distinct 
services. 

The  milling-in-transit  privilege  is  probably  Ww 
best  known  of  these  manufacturing-in-transit  nr- 
rangenients.  With  the  expansion  of  the  r.iilway  s\  ^ 
tem  of  the  United  States  in  the  early  seventies,  tluK 
came  readjustments  in  fiour  milling.  For  example . 
a  new  milling  industrj'  began  to  develop  in  Wisconsin 
and  Minnesota.  Hitherto,  the  important  flour  milN 
had  been  located  in  the  f2ast  and  in  the  Midtlle  We-i. 
With  chan*^  •  in  agricultural  conditions,  the  estali- 
lished  mill  !  to  look  ^'.n-ther  West  for  wheat.  Tlic 
new  western  mills  were  m  a  position  to  obtain  their 
grain  locally,  in  the  first  instance,  by  wagon  haul. 


INTERCHAXGING  TRAFFIC 


197 


The  railways  competing  for  their  husiness  gave  low- 
rates  eastbound  on  the  milled  product.  The  rates 
were  further  held  down  by  the  proximity  of  these 
mills  to  the  Lakes. 

At  the  same  time  the  established  mills  farther  East 
were  apparently  faced  by  a  cost  which,  as  compared 
with  the  costs  of  the  western  mills,  would  be  pro- 
hibitive. For  it  appeared  as  if  the  eastern  mills 
would  have  to  stand  the  rate  of  the  relatively  long 
liaul  on  their  wheat  in  and  the  full  rate  on  the  tiour 
out.  To  meet  this  condition,  the  railways  developed 
the  1  ^-in-transit  arrangement  whereby  the  ship- 

ment of  the  wheat  in  and  of  the  product  out  were 
treated  as  a  continuous  movement  on  one  rate  in- 
stead of  two  local  movements  on  two  local  rates. 

This  transit  arrangement,  which  is  mutually  advan- 
tageous, since  it  enables  the  miller  to  draw  upon 
wider  areas  for  his  supplies  and  insures  the  railway 
the  outward  movement,  is  now  widespread.  It  is 
taken  advantage  of  in  western  Canada  and  extensive 
use  is  made  of  it  in  eastern  Canada.  In  the  case  of 
grain,  flaxseed  and  grain  products  originating  in  the 
Xorthwest,  destined  to  Fort  William,  Port  Arthur 
and  Westfort,  and  shipped  to  millers  on  tiie  direct 
line  of  transit,  the  charge  is  the  current  local  grain 
rate  in. 

To  take  advantage  of  the  transit  arrangement,  the 
milled  product  has  to  be  ship])ed  out  in  six  months. 
If  so  shipped,  it  goes  out  on  the  balance  of  the  thru 
MHiin  mileage-rate  from  the  point  of  origin  to  final 


198 


INLAND  TRAFFIC 


destination,  plus  one  cent  per  100  pounds  for  terminal 
services  at  the  milling  point. 

A  similar  arrangement  is  made  when  the  grain  is 
shipped  to  elevators  for  cleaning  or  storage.  In  the 
adjustment  of  the  rate,  there  is  refunded  to  the  ship- 
per the  difference  hetween  the  local  rate  in  and  tiie 
thru  proportional  rate  for  the  inhound  haul. 

It  is  not  permissible  to  reship  outwards  one  kind  of 
grain  or  its  product  against  an  inward  billing  for  an- 
other kind  of  grain.  That  is  to  say,  wheat  or  its 
product  may  not  be  reshipped  against  inward  billing 
for  oats,  or  vice  versa. 

Under  grain  products  are  included  barley,  clean- 
ings, breakfast  foods  or  cereals  (uncooked),  bran, 
buckwheat,  buckwheat  flour,  chopped  feed,  cornflour, 
cornmeal,  flour  (made  from  grain  only ) ,  grits,  groats, 
hnseed  meal,  malt,  middlings,  millfeed,  oathulls,  oat- 
meal, oilcake,  oilmeal,  peas  (whole  or  split),  rolled 
oats,  rolled  wheat,  rye  flour  and  meal,  sweepings  and 
screenings,  shorts  and  wheatmeal.  Malting  is  covered 
by  the  transit  arrangement  on  the  same  general  con- 
ditions subject  to  the  further  condition  that  the  bal- 
ance of  the  thru  rate  will  apply  on  the  product  out- 
ward only  to  the  amount  of  80  per  cent  of  the  weight 
of  the  barley  covered  by  the  inward    billing. 

2.  Stop-over  arrangementH. — A  stop-over  is  al- 
lowed on  rough  lumber  for  dressing,  re-sawing  or 
sorting  and  reshipment.  Here,  while  a  similar  rate 
arrangement  is  permitted,  the  stop-over  is  limited  t(t 
thirty  days.     When  re-sawing  or  dressing  is  per- 


W 


INTERCHANGING  TRA7FIC 


i9r 


t'ornied,  the  outwards  weiglit  must  not  exceed  the  fol- 
lowing percentages  of  the  weights  shipped  into  stop- 
off  point:  95  per  cent  when  re-sawn  in  the  rough:  !)() 
per  cent  when  dressed  only;  85  per  cent  when  re-sa\vji 
and  dressed. 

3.  Tariffs  recognhc  principle  of  comignmcuta 
stopped  in  tranmt.—ln  the  tariffs  will  he  found  var- 
ious recognitions  of  the  principle  of  treating  the  con- 
signment as  a  thru  movement,  altho  it  is  stopped  in 
transit  for  one  purpc  e  or  another,  there  heing  some 
charge  for  such  stop.  The  more  important  exam- 
ples may  be  mentioned.  Apples  may  be  shipped  to 
storage  and  inspection  points  for  subsequent  reship- 
nient.  Beans  may  be  held  for  cleaning  and  reship- 
ment.  Coal  and  coke  may  be  reshipped  in  the  same 
car  if  there  is  no  breaking  of  bulk.  Provision  may 
l)e  made  for  completion  of  carloads  of  hog-s,  or  for 
feeding  in  transit. 

4.  Changing  destination  in  transit. — While  the  con- 
tract of  carriage  is  in  reality  concerned  with  the 
movement  between  the  points  set  out  in  the  bill  of 
lading,  the  railways  arrange  for  changing  destina- 
tion. This  is  of  advantage  because  when  the  commod- 
ity goes  forward  it  may  not  be  known  what  is  the 
l)est  market  for  it;  or  when  it  is  in  transit,  information 
as  to  a  better  market  than  that  to  which  it  was  orig- 
inally consigned  may  be  obtained.  On  payment  of 
•Si  per  car  for  each  change  of  destination  in  transit, 
the  railway  will,  on  request,  attempt  to  change  the 
destination.     In  addition,  the  difference  between  the 


200 


INLAND  TUAFFIC 


rate  as  paid  and  tlie  rate  to  the  ultimate  destination 
has  to  be  paid. 

In  the  event  of  a  ear  bein^  hauled  «)ut  of  tlie  direet 
line  from  the  shipping  point  to  its  ultimate  destina- 
tion, a  eharge  of  one  eent  per  ton  per  mile,  with  a 
miiiinmm  of  twenty  miles,  will  be  made  for  extra  haul. 
But  in  no  case  must  the  total  eharges  exceed  the  local 
rate  to  and  from  the  point  at  which  t'  «  change  of 
destination  is  made,  plus  the  charge  for  chmge  of 
<lestination.     The  extra  services  and  responsibilities 
which  this  change  in  transit  places  on  railways  are: 
the  sending  of  a  telegram  to  the  agent  at  the  pohit 
where  the  change  is  to  be  made;  the  agent  at  that  point 
nmst  be  on  the  lookout  for  the  car,  and  this  may 
require  his  going  to  the  van  of  each  freight  train  that 
passes  in  order  to  examine  the  conductor's  record: 
when  the  car  is  found  it  must  be  rebilled  and  the  way- 
bill must  be  checked;  the  amount  of  charges  must 
be  verified  and  the  auditor  of  the  de])artment   in- 
formed ;  the  car  nmst  be  cut  out  of  the  train  and  put 
to  one  side,  thus  necessitating  switching,  etc.:  the  car 
must  be  picked  out  and  put  on  the  new  train;  the  rail- 
way company  must  assume  the  legal  responsibility  of 
deciding  whether  or  not  the  party  who  asked  that  the 
destination  of  the  car  be  changed  owns  the  mercha!i- 
dise  and  has  the  right  to  deal  with  it. 

5.  Concentration  rates.— A  concentration  or  assem- 
bling arrjingement  is  of  advantage  to  shippers.  A 
part  carload  of  horses,  cattle,  hogs  or  sheep  charged 


INTEUCHAN(iIN(;  TRAFFIC 


201 


at  carload  rate  and  weight  from  original  point  of  ship- 
ment to  final  destination  may  he  stopped  in  transit, 
on  the  direct  run,  for  comj)Ietion  of  load  at  an  addi- 
tional charge  of  $:i  per  car  for  each  stop.  In  the  case 
of  poultry,  the  charge  is  $.>.  In  hoth  of  these  eases. 
if  there  is  an  out-of-line  haul,  there  is,  in  addition  to 
the  stoj)-off  charge  already  mentioned,  a  charge  of 
one  cent  per  ton  per  mile,  with  a  minimum  of  $a. 

Butter,  cheese  and  eggs  when  shipped  in  less-than- 
carload  quantities  (in  the  case  of  cheese,  2,000  pounds 
or  over)  to  cold  storage  points,  for  cold  storage, 
branding  or  inspection  and  reshipment,  have  a  special 
rate  basis  in.  Such  commodities  when  exported  are 
given  the  advantage  of  the  export  rate  from  the  origi- 
nal shipping  point  to  the  port  of  export,  plus  2  cents 
per  100  pounds  for  stop-over. 

0.  Special  rate  rcfhtctions.—Ai  times,  the  railways 
carry  pedigreed  stock  at  half  rates.  This  is  regarded 
by  the  railways  as  a  matter  of  concession,  not  of  right. 
The  smaller  roads  when  asked  for  such  an  arrauirc- 
inent,  reply  that  their  traffic  will  not  warrant  the 
reduction. 

Seed  grain  is  carried  at  reduced  rates.  This  con- 
cession is  not,  however,  a  continuous  one.  It  is  pub- 
lished from  season  to  season,  -is  crop  conditions  seem 
to  demand  it. 

With  a  view  to  facilitatin£«-  seLllement,  the  railways 
in  the  Xorthwest  carry  settlers'  effects  in  carloads  at 
reduced   mileage   rates.     The    Canadian    Pacific   re- 


202 


INLAND    TRAFFIC 


strlcts  this  concession  to  settlement  on  its  own  lines. 
The  Canadian  Northern  does  not  so  limit  the  con- 
cession. 

7.  Cartage  *r;T/<T.— Beginning  about  1855,  the 
C'ana(han  railways  performed  cartage  service.  Tntil 
1892,  there  was  no  charge  by  the  railways  for  the 
service.  In  1893,  because  of  the  increase  of  the  cost 
of  cartage,  the  railways  added  to  their  rates  l]  cents 
per  hundred  pounds  in  the  case  of  the  first  four  classes 
of  the  classification,  and  to  the  fifth  class  1  cent.  In 
1903,  the  charges  were  eciualized  by  making  the  addi- 
tional amount  so  collected  U  cents  per  hundred 
pounds  for  the  five  classes.  In  1908,  \  cent  per  hun- 
dred pounds  was  added.  This  made  the  charge  to 
the  public  2  cents  per  hundred  pounds,  wi'th  a  min- 
imum of  1.5  cents  ""H  smalls. 

At  the  same  time,  the  railways  were  paying  the 
cartage  companies  that  performed  the  service  in 
Montreal,  for  example,  21  cents  per  one  hundred 
pounds.  In  1912,  application  was  made  to  the  Board  to 
])ermit  the  charge  to  the  public  as  set  i  ut  in  the  taritt^ 
to  be  raised  to  3  cents  per  hundred  pounds,  with  a  min- 
imum of  20  cents  on  smalls.  Evidence  was  submitted 
by  the  cartage  companies  as  to  the  great  increases  in 
their  cost  of  operation.  Permission  was  given  to  the 
railways  to  collect  2^  cents  per  hundred  pounds  from 
the  public,  the  smalls  charge  remained  unchanged. 

The  cartage  service  has  been  performed  in  Eastern 
Canadi?  by  the  Dominion  Transport  Company  and  tin 
Shedden  Conipany,  the  railways  having  made  con- 


INTEHCUAXGING  TRAFFIC 


9()f} 


tracts  with  these  compiuiies.  It  was,  of  course,  open 
to  the  individual  ship[)er  t(»  perform  the  cartage  ser\  - 
ice  to  and  from  the  railway  sheds.  In  practice,  how- 
ever, it  was  found  that  in  the  hulk  of  the  husiness,  it 
was  more  expeditious,  as  well  as  more  economical,  to 
have  it  performed  hy  the  cartage  companies.  The 
i.vtter  have  made  and  accepted  deliveries  of  out- 
Itoiind  and  inhound  packa^'e  freight  at  different  shed 
doors,  thus  aiding  the  railway  in  the  matter  of  dis- 
trihution  of  freight  within  the  sheds,  and  conse- 
(|uent  increase  of  expedition  in  handling.  Hills  of 
lading  are  signed  hy  the  teamsters  of  the  cartage  com- 
panies. 

The  railways  contended  that  the  increased  cartage 
charge  which  was  allowed  in  1912  did  not  sufficiently 
reimhurse  them  for  the  payments  they  had  to  make  to 
the  cartage  companies.  L'pon  the  reissuance  of  the 
class  tariff's  to  western  points  hrought  about  hy  the 
Hoard's  decision  in  the  Kegina  Rates  Case,  the  rates 
in  Western  Canada  were  published  exclusive  of  cart- 
age, i.e.,  shippers  and  coiLsignees  were  obliged  to 
furnish  their  own  cartage.  At  the  s[mie  time  an  ar- 
rangement was  made  by  the  railways  whcov,  in 
respect  to  the  ser\'ice  performed  by  designated  cartage 
companies,  they  undertook  to  bill  forward  for  collec- 
tion from  the  consignee,  the  cost  of  cartage  on  out- 
bound business.  The  railways  in  adopting  the  dis- 
criminatory practice  of  limiting  this  concession  to  des- 
ignated transfer  companies  at  the  various  points, 
stated  that  it  would  be  impossible  to  let  all  the  iso- 


S04 


INLAND  THAFFU: 


lated  inoveincnts  by  private  convyuiice  participate  in 
it,  because  ol'  tbe  additional  bookkeeping  expense 
it  would  entail.  Tbe  consignees  objected  to  tbe  rail- 
way's billing  forward  tbe  cartage  cbarge.  Tbey  said 
that  it'  it  is  an  expense  properly  attacbable  to  tbe  sale 
of  tbe  g(MMls  let  it  be  covered  by  the  invoice.  While 
it  was  a  convenience,  it  was  not  in  the  terms  of  the 
Railway  Act  a  railway  service. 

8.  Cartage  charge  not  under  BoanVn  jurmUction. 
-  xlie  subject  of  a  cartage  charge  is  not  a  matter 
which  is  subject  to  the  jurisdiction  of  the  Board.  The 
question  as  to  whether  the  consignees  should  or  should 
not  pay  cartage  is  entirely  a  matter  of  contract  be- 
tween the  consignors  and  consignees.  In  each  case, 
the  (luestion  as  to  whether  the  cartage  charges  should 
be  paid  by  the  consignor  or  consignee  depends  on  the 
terms  of  the  contract. 

The  railways  proposed  to  cancel  all  cartage  tar- 
iffs effective  October  1,  1913,  as  they  desired  to 
discontinue  contracts  which  they  had  made  with  the 
Cartage  Companies.  The  railways  urged  that  while 
they  had,  in  the  past,  been  absorbing  part  of  the 
charge,  the  service  was  not  a  railway  service,  but  one 
which  had  been  given  to  relieve  the  general  situation 
and  for  the  convenience  of  the  public. 

Negotiations  took  place  which  led  to  the  service 
being  continued  on  new  rates  and  at  the  expense  of 
the  ship])ers.  The  Board  held  that  the  work  of  cart- 
age was  not  a  railway  service  or  facility  within  the 
meaning  of  the  Railway  Act ;  and  that  while  the  cart- 


ft 


INTi:HC'nA\(;iN(;  THAFFIC  <eor> 

a^e  rates  arc  (,m,to(!  i„  th.  tanH's  Mini  uwtl,  the  I{.,anl 
tUc  iJoanI  lias  no  jurisdietioii  „ver  tlu-  C  arta^o  C  om- 
I'anies  |Kit'(,n„i„^r  the  service;  and  that  the  rates  „,„„, 
^vhieh  they  ,,ertoni.  the  serviec-  for  the  railways  are 
<iq>e-n<]c„t  entirely  upon  eontraets  (,ver  the  tenns  of 
ulueh  the  i{„anl  has  no  nmtrol.     The  siti.ation  was 
that   while   the   railway   nn^ht,   cf   iis  „wn   v(,lit..,n 
« -ter  into  an  arrangement  with  earta^e  ecnpanies 
tor  the  perf„nnanee  of  the  serviee  on  eertain  terms 
the  Board  had  no  power  under  the  Hailway  Aet  to 
••rder  it  to  make  arrangements  as  to  these  eartaire 
^-rviees  with  hodies  over  whieh  it  had  no  eontrol  wh^t- 
ever. 

RKVIKW 

What  is  a  milling-in-transit  ratt-.^     Wl.v  is  it  nmt.iallv    .,k«n 
ta^eous  to  miller  and  railway?  "  """"«">    'dvan- 

Oiscuss   Cf>ncentrati«iii    rates. 
What  otiier  special  rate  reductions  Ho  the  railvvavs  rnak,- » 

.rs   eharg"* '""         '''''  '""'"''•"  ''^*'  ""  *'"'  ''"-^-"  "^  «  -^t- 


w 


CH/U^TKR  XIII 


s 


IS- 1 


PASSENGER  TRAFFIC 

1.  Water  and  port  competition  in  passenger  traffic. 
—Passenger  rates  are  not  affected  by  competition  of 
markets  and  only  to  a  slight  extent  by  competition  of 
ports.  While  the  development  of  facilities  for  for- 
eign travel  by  way  of  a  particular  port  may  attract 
passenger  traffic  by  rail  from  one  route  to  anotlier. 
this  depends  upon  the  preference  of  the  passenger, 
not  on  mere  cheapness  of  route.  While  to  the  ton  of 
freight  the  cheapness  of  the  rate  is  the  thing,  in  the 
case  of  the  passenger  there  enter  in  conditions  of  per- 
sonal comfort,  scenic  attractions  of  the  route,  and  tin 
like,  which  may  more  than  outweigh  a  lower  rate  af- 
forded by  a  shorter  mileage  to  a  particular  port. 

Water  competition  and  its  ccmcomitants  which,  in 
certain  phases,  connect  themselves  with  com])etition  of 
ports,  are  also  much  less  important  here.  The  coni- 
pctititm  of  the  Great  Lakes  attracts  tourist  tratlic-. 
But  the  business  man  who  has  to  meet  some  business 
engagement  seeks  the  most  expeditious  rail  route' 
Low-grade  bulky  freight  is  attracted  by  water  because 
the  rate  is  more  important  than  the  time  of  transit. 
Within  limits,  the  time  of  transit  is  more  important 
to  the  business  man  than  is  the  rate. 

•206 


wr^smsm^^m^^^^imi 


.^^Mi-Z 


jKL 


''WW 


PASSENGER  TRAFFIC 


207 


In  freight  business,  ocean  e()iiii)etition  connects  it- 
self with  port  competition  when  a  particuhir  port  may, 
hy  attracting  a  hirger  vohime  of  tramp  tonnage,  af- 
ford a  cheap,  slow  and  perhaps  roundabout  route  for 
freight,  lint  here,  again,  on  the  ocean  movement, 
time  and  directness  of  route  are  more  important  to  the 
passenger. 

2.  Distance    important    /V/r/or.— Distance    affects 
passenger   rates   nuich   more   directly    than   it    does 
freight  business.     Ueference  has  been  made  to  the 
extent  to  which  circuitous  routes  :nay  enter  into  tiie 
transportation  of  freight,     liut  in  the  movement  of 
passenger  business  between  Xew  York  and  New  Or- 
leans where  the  most  roundabout  route  is  .5.3  per  cent 
longer  than  the  most  direct,  normally  passcfiger  travel 
between  these  two  points  will  seek,  if  not  the'^shortest, 
at  least  the  shorter  routes.     For  if  the  longest  route 
is  taken,  there  will  be  such  an  addition  of  time  to 
the  journey  that  unless  the  rate  is  very  much  reduced 
the  additional  expenses  of  travel,  meals,  sleeper  ac- 
commodation, etc.,  will  more  than  take  up  the  rate 
advantage,  if  any.     Again,  in  the  movement  from  the 
eastern  states  to  San  Francisco  by  a  broken  rail  and 
water  route  by  way  of  \^ancouver  as  compared  with  a 
direct  all-rail  route,  the  former  may,  on  account  of 
the  ma,Tnificent  scenery  of  the  Canadian  Kockies,  at- 
tract the  tourist,  but  the  latter  will  attract  the  busi- 
ness man. 

3.  Ti?nc  clement. — In  passenger  travel,  the  time 
element  is  much  more  important  than  the  rate  ele- 


W 


^:^y^A 


Jliiw:,^^^ 


ti*^ 


2()S 


INLAND    TRAFFIC 


nient.  But  this  must  l)e  incKlitied  l)y  the  fact  that  it 
the  time  taken  in  transit  is  not  too  great,  a  slowei- 
and  more  circuitous  route  may  within  rather  narrow 
limits  compete  with  a  more  direct  route. 

This  is  recognized  in  the  transportation  field  he- 
tween  Chicago  and  New  York.  The  high-speed  trains 
are  excess-fare  trains.  Between  Detroit  and  Buffalo, 
the  Michigan  Central  has  its  high-speed  excess-fan 
train,  the  "Detroiter."  The  Grand  Trunk,  hecausc 
of  its  longer  line  hetween  Chicago  and  Xew  York, 
formerly  had  a  differential  rate  of  $10  first  class,  as 
compared  with  the  $18  rate  of  the  Michigan  Central 
and  other  standard  lines.  The  excess-fare  trains  ar. 
run  on  the  principle  of  a  i)remium  for  higher  speed. 
the  premium  Ir  '  repaid  if  the  time  is  not  made 
During  the  p  of  the  war  when   all   non-es- 

sential services  were  eliminated,  the  Railroad  xVdmiii- 
istration  withdrew  the  excess-fare  trains  and  aholished 
all  differentials.  The  excess-fare  trains  have  been 
restored  hut  not  the  differentials. 

The  excess-fare  train,  on  account  of  the  limited 
numher  of  cars  it  c...i  haul  and  the  superior  luxury 
it  aff'ords  its  passengers,  is  more  costly  than  the  lowt  i 
speed  trahi.  Possibly  a  railway  may  feel  that  it  c;;!i 
in  a  way  regard  this  ditt'erence  as  being  properly 
chargeable  to  the  advertising  which  such  a  servicr 
gives  the  railway.  Hut  the  additional  costs  are  n.-t 
limited  to  the  train  movement  alone,  'i'he  high  spet<i 
means  greater  expenditures  on  track  and  equipment 
than  would  be  necessary  with  more  moderate  speed 


PASSENGKR  TRAFFIC 


209 


To  the  extent  that  it  does  not  meet  its  proper  share  of 
this  expense  the  slower  methods  of  travel  mnst  pay 
more  than  tlieir  proper  share.  The  superior  facility 
of  the  excess-fare  train  should  he  eomj)ensated  for 
l)y  an  excess  fare  commensurate  with  the  increased 
cost,  not  merv?ly  hy  a  nominal  p -nalty. 

4.  h\rpcn.siic    stalions.—In    the    (Jevelopment    of 
passenger   husiness,   more   exj)ensive   passen«4cr  sta- 
tions are  called  for  in  the  larger  cities.     The  expense 
of  these  may  he  measured  in  millions  of  dollars.     «ut 
when   measured   in   terms  of  passen.irer  traffic,   the 
terminal  expense  per  unit  is  relatively  small.     The 
expense  of  the  passencrer  ternu'nal  may  he  considered 
as  rou<,ddy  proportional  to  the  husiness  in  and  out 
of  the  point  it  serves.     It  is  not  necessarily  increased 
in  expense  hy  the  matter  of  a  thru  movement.     In 
IVeight  husiness,  the  constantly  cxpandino-  terminals, 
while  in  part  attrihutahle  to  local  conditions,  are  also 
attrihutahle  to  general  increase  in  the  husiness  of  the 
cDinitry. 

The  congestion  of  freight  facilities,  wliich  y\nu[. 
ival  at  times  faces,  is  not  due  simply  to  the  husiness 
local  to  Montreal;  the  exi)ort  husiness  is  also  an  im- 
I'ortant  factor.  Passenger  husiness,  for  example,  at 
Winnipeg,  while  affected  hy  the  movement  of  settlers 
tliru,  is  roughly  ])rop()rtioned  to  the  husiness  local  to 
\\'inmpeg.  In  older  sections  which  have  heen  longer 
settled,  this  holds  in  greater  degree.  l?ut  when  The 
C.madian  Pacific  acquired  land  at  $1,000  per  acre  for 
terminal  purposes,  at  Transcona,  this  was  due  to  the 


Hi 

in 


210 


INLAND  TRAFFIC 


If 


general  expansion  of  the  freight  business  of  the 
Northwest.  Since  1004,  the  Canadian  Pacitic  has  re- 
built and  remodeled  every  one  of  its  freight  terminals 
from  Fort  William  to  Vancouver.  The  freight  busi- 
ness re<iuires  a  large  amount  of  service  in  terminals, 
all  of  which  takes  time,  space  and  expe»ise.  The  pas- 
senger loads  and  unloads  himself.  In  purcliasing 
his  ticket,  he  classifies  himself  in  point  of  service. 

While  the  terminal  expenses  tend  to  become  of  in- 
creasing importance  in  freight  business,  in  passenger 
business  it  is  the  cost  of  haulage,  the  line  costs,  which 
are  more  important. 

5.  Other  /flrr/or.9.— Wliile  the  ton-mile  rate,  be- 
cause of  conditions  already  referred  to,  ends  to  de- 
crease as  the  distance  increases,  the  passenger  costs 
are  much  more  constant.  Consequently,  the  distance 
factor  is  much  more  important  in  passenger  business. 
Again,  disturbing  conditions  of  competition  such  as 
are  present  in  freight  business  are  much  less  in  evi- 
dence here. 

The  passenger  fare  for  a  journey  is  a  multiple  of 
rate  and  distance.  That  is  to  say,  the  principle  of 
equal  mileage  rates  without  a  tapering  of  the  rate  as 
the  distance  increases  may  be  more  readily  applied 
here.  The  actual  rate  api)lied  may  be  modified  by 
return  trip  rates,  commutation  rates,  excursion  tri[) 
rates,  etc.  So  it  does  not  happen  that  the  rate 
charged  is  an  exact  multiple  of  the  standard  rate.  It 
is  computed  that  in  Canada  not  more  than  twenty  per 
cent  of  the  passenger  travel  is  carried  on  one-way 


Hi* 


PASSENGER   TR.VFFIC 


211 


first-class  tickets  based  on  the  standard  rate  per  mile. 

On  the  long-haul  business,  modifications  of  the  dis- 
tance basis  and  entrance  of  the  grouping  princij)le  in 
a  mo(hfied  form  may  be  found.  From  Montreal  to 
\'ancouver,  the  first-class  limited  fare  of  the  Cana- 
dian Pacific  is  $102.34,  while  from  Ottawa,  a  dis- 
tance shorter  by  11.5  miles,  the  rate  is  .$98.94'.  On 
round-trip  tourist  tickets  grouping  or  blanketing  may 
l)e  found  to  a  greater  extent.  Thus  the  all  year 
round-trip  tourist  rate  from  Ottawa  to  Vancouver  is 
8178.10.  This  rate  is  blanketed  as  far  as  Prescott, 
covering  such  points  as  Finch  and  Winchester. 

In  the  freight  business,  the  movement  is  a  one-way 
one.  That  is  to  say,  the  transportation  is  concerned 
only  with  the  movement  of  the  ommodity  to  the  mar- 
ket. The  cars  nuist  be  taken  back  either  empty  or 
tilled  with  some  other  c  ^'modify.  IJut  the  passen- 
ger  business  is  better  balanced.  A  man  goes  from 
iiis  home  town  to  a  near-by  town  on  business;  in  a 
short  time,  he  returns.  In  the  absence  of  alternative 
routes,  the  passenger  business  which  goes,  returns. 
Of  course  this  is  subject  to  the  exception  which  arises 
in  the  case  of  incoming  settlers  in  the  Northwest, 
'^ut  this  is  only  a  momentary  disturbance  of  the 
i)alance.  Once  their  economic  condition  improves, 
they  also  begin  journeys  away  from  home  with  their 
consequent  return.  While  there  cannot,  in  the  na- 
ture of  things,  be  a  perfect  balance  of  mileage  at  a 
given  time,  there  is  proportionately  less  empty  mile- 
age due  to  a  lack  of  return  business. 


213 


INLAND  TRAFFIC 


While  freight  business  may,  to  a  considerable  ex- 
tent, be  stimulated  by  reduced  rates,  this  docs  not  hold 
true  to  the  saine  extent  in  passenger  business.  Tlu- 
energetic  advertising  of  the  passenger  departiricin 
does,  indeed,  stinudate  a  demand  for  tourist,  trans- 
continental, colonization,  round-the-vvorhl  traveling. 
But  the  extent  to  which  this  can  be  developed  de- 
pends upon  the  income  of  the  individual.  There  arc 
not  oidy  the  incidental  expenses  of  train  travel,  l)ut 
the  hotel  and  other  expenses  along  the  way  are  also 
large.  The  extent  to  which,  then,  there  is  a  responsi 
to  such  methods  of  stinmlating  travel  depends  on  tlu- 
opinion  of  the  individual  as  to  some  business  gain  to 
be  obtained,  or  upon  his  surplus  income.  Conces- 
sions in  rate  are  apt  to  have  the  most  noticeable  ef- 
fects in  connection  MAh  commutation  business  on  a 
relatively  short-haul  movement.  The  comnmtatioii 
rate  permits  the  business  man  t(^  live  some  distance 
out  oi  the  city.  His  family  thus  becomes  dependent 
upon  train  travel.  The  excin-sion  rate  stimulates  hol- 
iday travel.  But,  here  again  the  matter  of  surplus 
income  is  a  determining  factor. 

6.  P as.se II f/cr  business  in  praeticc. — Comparison 
between  freight  and  passenger  business  is  natural  be- 
cause thev  are  the  two  main  sources  of  railway  in- 
come.  While  thev  are  not,  because  of  inherent  dil- 
ferences,  exactly  comparable,  they  are  of  interest  when 
considered  jointly,  because  they  are  com])lementary. 
A  freight  traffic  man  may  look  askance  at  the  adver- 
tising expenses  of  the  })assejiger  department.     The 


PASSFNGER  THAFFK 


ai!J 


j)assen^rer  man  will  respond  that  while  ii  may  he  ditW- 
c'lilt  to  point  out  the  exaet  return  from  sueh  advertis- 
ing-, it  not  only  ereates  passenger  trallie  hut  also  aids 
in  attraetino-  t'iei«.ht  husiness.     It  may  he  too  hroad  a 
^•eneralization,  altho  it  is  sometimes  stated,  that  the 
line  on  whieh  a  man  travels  is  the  line  he  will  route 
his    freight    over.     \\'hether   or    not    he    does    so    in 
praetiee  depends  on  the  matter  of  frdi-ht  faeilities. 
Hut  if  a  man  is  favorahly  impressed  hy  the  j)assen<^er 
serviee  he  reeeives,  it  has  some  eft'eet  on  his  shipping 
instrueticjns.     Mr.  \V.  J'.  Hinton,  (ieneral  Mana'-e?- 
of  the  Grand  Trunk  Paeirte,  who  has  had  u  diversitied 
experienec  holh  in  freioht  and  })assei\ger  husiness.  put 
the  matter,   from   the   passeuf'er   man's   standpoint, 
very  aptly  when  he  said: 

Under  tjjc  Raihvay  Act  of  Canada,  trans[)ortaii()n  com- 
panies are  permitted  to  give  special  fares  and  concessions  t(» 
land  settlers,  a<rricultural  exhibition  managers,  exliihition  and 
commercial  travelers.  The  ultimate  results  are  reaped  hv 
the  freight  department,  owing  to  the  settlement  of  the  land, 
the  improvement  of  crops,  and  the  additional  sale  antl  dis- 
tribution of  merchandise  and  supj)li  s. 

T.  Passenger  and  frciijht  reeeipts  earn  pared.  Kef- 
crenee  to  eertain  phases  of  the  frei<»iit  })usiness  whieh 
have  already  heen  made  show  how  mueh  more  im- 
portant freioht  husiness  is  in  terms  of  railway  receipts 
than  is  passen^rer  husiness.  In  the  newly  developed 
;ind  more  sparsely  settled  sectirms,  a  preponderance 
nf  freight  husiness  is  always  found.  While  in  Eng- 
land every  ^WO  of  revenue  is  divided  hetwecn  pas- 


■--  t""     ^  h  r. 


mm 


2U 


INLAND  TRAFFIC 


if] 


If. 


ii- 


sen^er  and  freight  business  in  the  ratio  of  $47  to  $5,'J, 
in  Canada  the  ratio  is  $.'n  to  $09.  In  the  ITnited 
vStates,  a  .somewhat  siniihir  ratio  is  to  l)e  found,  althc* 
in  the  more  densely  settled  eastern  states  the  ratio 
is  $44  to  $5(}.  Progressive  increase  in  density  of  pop- 
ulation, other  things  being  eciual,  may  be  expected  t.) 
increase  passenger  business. 

While  the  receipts,  and  work  done  in  freight  busi- 
ness may  be  expressed  in  ton-mile  e/rnings  the  pas- 
senger mile,  which  is  also  a  work-distance  unit,  is 
used  to  measure  passenger  earnings.  While  the  ton 
mile  is  made  up  of  two  exact  quantities,  passenger 
mileage  is  made  up  of  one  inexact  and  one  exact 
(juantitative  index. 

In  Canada,  in  the  period  1919-1923,  the  number  of 
passengers  carried  decreased  6.3  per  cent,  while  the 
receipts  decreased  by  11.7  per  cent. 

The  earnings  per  unit  in  passenger  and  in  freight 
business  in  Canada  for  a  period  of  years  are  of  in- 
terest : 


Average  receipts  per  passenger 
j)«'r   mile    -i.GA 

Average  receipts  per  ton  i)er 
mile     


1919 
< 

1930 

1921 

1922 

< 

1923 

4 

J.63 

2.9'2 

3.04. 

2.82 

2.76 

1.003 

1.071 

1.200 

1.039 

.987 

ill 


8.  Density  of  traffic. — In  freight  business,  an  in- 
dex of  increasing  business  is  freight  density,  that  is, 
tons  hauled  one  mile  per  mile  of  line.  In  passenger 
business,  a  similarly  constructed  index,  viz.,  the 
number  of  passengers  carried  one  mile  per  mile  of 


^^'<)ijfft.-~*'.jnjmt. 


PASSKNG KR  Tl! A FFIC 


215 


line  may  be  used.     For  the  period  ^iveii  the  figures 
for  Canada  are  as  follows: 

l!»l!l  l!».'()  in.M  1<)J.>  IHJ-J 

l'as>.cnjr«T  tlt-nsity    !):i.()(iH       H't.JM)       ;i,ViH       7(),7,>l       TiiJJS 

I  rfi^tht   density    (JfJO.Oli     H()<»,h:}J     (i(»(),;J7:{     "(»;{.,«()     8U».<i!i.'. 

In  192.'}  passenger  density  was  18  per  cent  lower 
than  in  1919  while  freight  density  was  about  2.'}  per 
•ent  higher.  While  1919  was  abnormal  in  respeet  to 
both  figures,  it  is  nevertheless  elear  that  passenger 
density  was  unal)le  to  hold  its  own.  During  this  pe- 
riod, single-traek  railway  mileage  in  Canada  inereased 
from  3«,'5*4  to  39,821,  a  growth  of  1.177  miles  or 
a!)out  3  per  eent.  Total  freight  tonnage  was  about 
<)  per  eent  higher  in  1923  than  in  1919  and  freight 
reeeipts  21  per  eent  higher.  Passenger  trattie  figures 
are  given  on  the  preceding  page. 

9.  Effect  of  economic  depression  on  passenger 
business. — In  passenger  business,  one  bad  year  by  its 
curtailment  of  income  affects  business  in  succeeding 
years.  While  only  500  miles  of  railway  were  con- 
structed in  1908,  the  freight  business  of  that  year 
showed  a  shar])  increase  over  1907.  It  is  true  that 
it  took  until  1910  to  get  back  to  the  normal  situa- 
tion. Similarly  in  1921  there  was  a  sharp  decrease 
in  the  average  journey  and  in  the  average  number  of 
j)ersons  per  train  as  compared  with  1919.  But  in  the 
case  of  passenger  business,  the  curtailment  was  felt 
most  after  the  depression  year.     Passenger  business 


i'd  ^^ 


:l 


r* 


f 


III 

m 
ii 


HUi 


INLAND  THAFMC 


is  more  readily  afleeted  by  fiiiaiieial  (listiirhanees  than 
IS  trei«'lit.  Fiiiaiieial  (iepressioii  may,  thru  iieee«sit\ 
of  the  pnxhieer,  stimulate  freight  trallie. 

rasseii^er  travel  in  Canada  tends  rougldy  to  in- 
erease  in  the  same  ratio  as  popidation.      It  is  more 
readily   alleeted    than    freight   hy   eeonomie  disturh- 
anees.     Keonomie   depression    may,    thru   the   iieees- 
sity  of  the  produeer,  stimuhite  Irei-^iit  traffic.     People 
do  not  have  to  travel:  they  have  to  he  elothed,  i't-il. 
housed    and    warmed.     The    creation    of    nassen^'ci 
travel  depends  on  human  volition.     The  ereatioii  ol 
freight  Iratfic  thru  the  prochiction,  for  example,  of  the 
«^reat  a<>ricultural  staples  depends  on  weather  and 
climatic  conditions.     In  passenger  business,  one  bad 
year,  hy  its  curtailment  of  income,  att'ects  business 
in  succeeding  years.     I\Ieasured  in  trips  per  cai)ita. 
i.  e.,  freijuency  of  travel,  passenger  business,  whieli 
"  U  after  the  depression  in  the  year  1908,  took  until 
11)12  to  recover.     In  the  same  period  there  was  a 
steady  increase  of  freinht  traffic  j)cr  capita.     On  tlic 
other  hand,  as  between  15)14  and  101. >,  the  decrease 
is  much  sharper  in  the  case  of  freight  traffic  than  in 
the  case  of  passenger  traffic.     The  war  brou<.ht  a  de- 
crease wliich  was  especially  marked  in  191,3.     From 
then  until  1919  there  was  an  upward  trend  in  pas- 
sen*»er  movement  and  a  decrease  until  1923. 

10.  Measurement  of  passenger  traffie. — A  measure 
of  passcn«>er  business  is  obtained  by  computing  the 
frecjucncy  of  travel  as  measured  in  trips  per  capita 
and  the  average  mileage  traveled  per  capita.     The 


_^-"i._^   ~-i^.i^,Ti^   1*1!  •: 


PASSK\(;i:i{  THAFFK  ji; 

fm^'ht  tnimc  may  he  iiuaMiml  in  terms  n\'  toimnirc 
|)i'r  c.Mpita.' 

I'.l^scntUT 

Year  '''■■'''•.  ^'"'"^  T..,„  p.r 

.    ' !\  :*•'•  II 

..i ;•;  ■*'"•■•'  i^-i 

.  ; '!•-  »K'-'  ii.i 

i     ^'  :«""  U.;J 

'    i '-^  :«:*:<•-?  lo... 

;   - ""  :»:»<>  i:u 

'■  '" J.i  U.>H.7  I  I  I 

1.,.,,  .'■  ■♦•"••'  \i> 

;-. .'"  "'^•'  '^•' 

;; ?•;  :«:«"•»  11.7 

'■'-* '■"  Mi.H  r:M 

11.  DiffcirmrH  in  frci(/ht  and  passe nf/cr  husincss. 

A  striking  (litt'erence  exists  between  frei^rht  .(iid 
passenger  business,  both  in  respeet  to  the  load  aiid  the 
haul. 

1919  !!).'()  lOJi  \i}>j  |<,>.{ 

\vfrafr,.  frt.jjrlit  l,,,ii(  in  iiiiU's.  ,  .  .      Ji»  .>,-,()  y,^  'h(I  'ss 

^^'''■"^'''  t"nM>«T  train    t;u  i.57  417  m  .',()> 

\\«Ta;r»'  pasM'iipcr  haul  in  miles.        Hi  tin  (;;i             »i;{  (in 

VwrajTf  pa.sMiijrfis  on  train   ....        7(»  (it  .-,7             5'-,  ;,h 

While  railways  have  been  able  in  the  freight  busi- 
ness to  haul  more  ears  behind  an  engine  and  get  more 
into  the  ears,  the  eonditions  are  ditt'erent  in  passenger 
luisiness.  For  192.*J.  the  freight  reeei|)ts  were  IVM] 
per  eent  of  the  j)assenger  reeei|)ts,  and  the  freight 
train  mileage  was  only  1.'}.'}  per  eent  of  the  passenger 

;  n..-  statistlos  „f  tlH-  (l..partn..-.,t  of  Uailwavs  a.ul  ranaK  fnrnish  tlu- 
I  .  n..mlK.r  .,f  pa.sM.nf:.rs  a„,l  tlu-  avn-a,..  ,,a.s..„,..r  haul,  as  wHI  as 
'Ik  total  trn-ht  tonnit;,-.  lo  (ret  tlu'  v.-ariv  (.onul/.tion  It  -  -i^s-nn.-.l 
"■'I  lilt-  rato  of  iMcrcaM-  in  thi-  intcrnris.ij  iMTio.l  l<(Oi -|<)i  |  w,,s  sDr.-id 
on  ev.nly  i„  each  y.-ar  an.l  that  this  rat.-  has  since  rontinue.i: '  The 
liiiiitations  ot  this  method  are  moLrnized. 


t,'%  '*♦!#'  C. 


j5^^^.  M: 


I? 


ir: 


iii' 


•JIH 


INLAND  THAFFIC 


train  mileage.  'Vhv  earnings  per  freight  train  milt 
were  $4. *.).>,  wliile  per  passenger  train  mile  they  were 
$2.27. 

12.  Caparitf/  of  cars. — The  eeonomies  of  heavier 
loadirifr  are  not  availahle  in  the  passenger  business. 
Altho  the  (Jreat  Northern  onee  attempted  in  pas- 
senger business  tlie  principle  of  maximum  loadin;; 
which  it  used  in  its  freight  business,  it  was  foimd  that 
the  princij)le  could  not  be  aj)plie(l.  With  the  f rt - 
(pient  service  which  hi^ldy  developed  passenger  busi- 
ness demands,  the  average  loading  per  train  is  low. 
The  standard  first-class  cars  of  the  Canadian  Pacitic 
seat  72.  The  .>8  passengers  accommodated  by  tlu 
average  train  could  be  handled  in  one  car,  with  spaci 
to  spare.  \Vhile  the  traveler  may  at  times  be  sub- 
jected to  overcrowding,  on  the  avera<(e  four-fifths  of 
the  seating  capacity  of  a  train  is  UFioccupied. 

Travel  in  Pullman  and  sleeping  cars  reduces  tlit' 
average  to  some  extent,  the  ordinary  maximum  carry- 
ing capacity  of  a  slee|)in^  car  beiti^  \wenty-seveii. 
However,  it  was  testified  in  the  Pullman  Rates  inves- 
tigation that,  on  the  Canadian  Pacific,  one  year  witli 
another,  there  were  not  on  the  average  more  than  tt  ii 
berths  occupied. 

While  sleeping-car  movement  and  parlor-car  movt- 
meiit  do  hold  down  the  average,  the  effect  is  not  as 
<4-reat  as  might  be  anticipated.  In  a  given  year,  only 
2.01  per  cent  of  the  total  number  of  passengers  on  the 
Canadian  Xorthern  were  carried  in  slee[)ers.  F<»i 
the  same  year,  the  Crrand  Trunk  carried  8.2.)  per  cciit 


passi:n(ji:h  thaffic 


31!) 


<'l"  Its  passcFi^rtr.,  in  .sltcpiii;.  cars  and  1.1.5  per  iviit 
III  parlor  cars.  On  the  Canadian  Pacific,  the  fi^ure^ 
was  .l.J)  per  cent  for  sleeping-car  l)usiness  and  \:2 
per  cent  t'(  r  parlor-car  business.  To  carry  seven  per 
tent  of  the  total  nuinher  of  passengers  in  rnllnians 
:ind  parlor  ears  meant  that  the  niilea^^e  of  these  ears 
uas  20  per  cent  of  tlie  total  passenger-car  niilea^rc. 
This  is  due  in  part  to  such  eijuipnient  being  used  on 
longer  hauls  and  in  part  to  the  lesser  carrying 
capacity  of  each  car. 

i;j.  "Dead"  ta/V////.— The  lesser  average  loading  in 
liasseiiger  car  business  means  increase  in  fare.  In 
passenger  business,  competition  in  service  has  led  to 
;m  increasing  weight  of  car.  This  is  especially  notiee- 
iil.Ie  in  sleeping-car  traffic.  West  of  Wimiipeg.  to 
.111(1  from  Vancouver,  there  is  a  solid  Pullman  move- 
ment just  as  there  is  between  Chicago  and  the  Pacific 
coast  of  the  United  States.  This  has  been  charac- 
tcri/.ed  by  the  carriage  of  additional  weight,  observa- 
tion cars,  buffet  cars,  etc.  The  competition  has  been 
one  in  luxury  and  service,  not  in  rate.  The  "Over- 
land Limited,"  between  Chicago  and  San  Francisco, 
lias  in  addition  to  observation  car  and  club  car  the 
following  services:  barber  and  baths,  valet,  stenog- 
rapher, ladies'  maid,  telephone,  electric  ventilation, 
telegraphic  news  service,  stock  and  market  reports. 
It  may  be  argued  that  a  lesser  competition  in  point 
of  luxury  would  have  been  a  better  business  poliev. 

14.  Increase  in  xceight  and  east  of  passenger  cquip- 
iiii'ut. — The  weight  and  cost  of  passenger  cars  has 


220 


ii 


■jV 


I!  1 


t: 


INLAND  TRAFFIC 


increased.  The  standard  passenger  engine,  for  ex- 
ample, which,  in  1000,  weighed  ahout  145  tons  liad 
by  1910  increased  to  ahout  175  tons,  at  which  figure 
it  stands  today. 

A  thru  train  on  the  Grand  Trunk  between  Mont- 
real and  Toronto  may  be  taken  for  comparative  pur- 
poses. The  train  is  composed  as  follows:  engine, 
mail,  baggage,  express,  second-class,  first-class,  diner, 
parlor  and  sleeper.  The  following  summary  com- 
pares the  weight  and  cost : 


Year 

1906 
1911 
1916 
1924 


Weight  of  rrain 
Lbs. 

1,144,000 
1,383,899 
1,577,000 
2,281,000 


Cost  of  Train 

$ 

108,173 
128,801 
175,379 
689,705 


The  weight  of  the  train  has  increased  99.4  per  cent, 
while  the  cost  has  increased  over  500  per  cent. 

A  similar  comparison  of  a  Canadian  Pacific  train 
in  transcontinental  service  may  be  made.  While 
there  have  been  changes  in  ecjuipment,  the  compari- 
son between  trains  is  valid. 


11^ 


?.i 


U 


Wt'ijilit  of  rrain 

Cost  of  Train 

Year 

I.hs. 

$ 

1906 

1,343,800 

128,177 

1911 

1,557,300 

161,295 

1916 

1,994,500 

242,694 

1924 

1,719,000 

640,500 

The  weight  of  the  train  increased  28  per  cent,  while 
the  cost  increased  about  400  per  cent. 


:]E^^iW^r-  imwmmm. 


^rm 


PASSENGER  TRAFFIC  221 

Taking  the  figures  of  1  {)()(;  as  100,  the  following 
comparisons  of  weight  and  costs  are  available : 

t-ar  Weight  Cost  Weight  Cost 

[^^^onkt    155  195  182  293 

^,r^.^ Ill  •••  139  r.i6 

/"""«t     163  20fi  168  281 

'^,'"^'''    105  119  109  125 

^''^^P^"-     112  ...  123  139 

15.  Relation  between  weight  of  vehicle  and  returns 
on  cost.— T:he  weight  of  the  vehicle  is  an  index  of  the 
work  to  be  done  in  earning  a  return  upon  the  cost. 
The  large  amount  of  dead  weight  which  has  to  be 
hauled  per  passenger  is  noteworthy.    The  returns  for 
1923  show  the  average  number  of  cars  for  all  trains 
in  passenger  service  as  4  and  the  average  number  of 
F)assengers  per  train  as  58.    How  the  cars  were  dis- 
tributed according  to  class  does  not  appear.    Assum- 
ing that  all  were  first-class,  the  result  would  be  that 
these  cars  hauled  only  20  per  cent  of  their  passenger 
capacity.     The  average  dead  weight  hauled  per  pas- 
senger traveling  would  be  about  5  tons,  while  the  cost 
of  the  vehicle  per  passenger  was  over  $1,000. 

16.  Weight  and  cost  measured  in  capaciti/.— The 
constant  tendency  to  increase  weight  and  cost  may  l)e 
measured  in  terms  of  the  capacity  of  Canadian  Pacific 
passenger  rolling  stock.  The  figures  are  based  on 
physicaL  not  normal,  capacity,  the  latter  being  much 
less.    Subject  to  this  caution,  the  comparisons  are: 

XV  c-lti 


h.- 


222  INLAND  TRAFFIC 

190ti  1911  1916 

Car  w't.  Car  cost  Car  w't.    Car  cost  Car  w't.  Car  cost 

Type  of          per  pass,  per  pass,  per  pass,    per  j)ass.  per  |)ass.  per  pass, 

cur                    H)s.  $  ll>s.                $  Hjs.  $ 

Colonist    -'303  160  -'750             250  33T7  383 

First     138o  IJJ  i:W8             15-'  1916  -'08 

Tourist    -'5S-'  -'-'-i  *-86            465  +35."  635 

Sleeper    4073  555  4592             555  5037  774 

Compartment-^  ...  7111  114;i  7111  l-'O' 

Observation   j 

17.  Occupaiicij   of  slecin..y   cars. — In   Gerinaiiy, 
calculating  Vih  passengers  as  weighing  a  ton,  it  has 
been  computed  that  93.75   per  cent  of  the  weight 
hauled  is  dead  weight.     Of  course,  passenger  fares 
are  not  calculated  on  weight;  but  the  computation  is 
of  some  value  as  indicating  where  some  of  the  cost 
of  passenger  business  is  to  be  found.     While  sleep- 
ing cars  are   supplied  with   both   upper  and   lower 
berths,  normally,  the  upper  berths  are  in  use  only 
about  one-fifth  of  the  time.     In  the  summer  months, 
all  the  accommodation  in  a  sleeping  car  may  be  taken 
up.     At  other  seasons,  there  is  often  much  empty 
space.     Calculations  made  by  the  Canadian  Pacific 
for  certain  winter  months  in  1910,  showed  for  Janu- 
ary of  that  year,   between   Montreal  and   Toronto 
which  is  a  heavy  passenger  run,  88  per  cent  of  tlu' 
lowers  and  29  per  cent  of  the  uppers  were  occupied 
westbound;  while  eastbound  tlie  percentages  were  8<> 
per  cent  and  27  per  cent  respectively.    For  the  month 
of  March,  between  Toronto  and  Winnipeg,  the  per- 
centages of  occupancy  were  renpcctively  20  per  cent 
and  14  per  cent.     In  the  same  month,  between  Mon- 
treal and  Vancouver,  the  occupancy  westbound  was 


mmmmm 


^^r^^mmtmm 


wm. 


PASSENGER  TRA      ^C 


Hfta 


70  per  cent  and  34  per  cent,  while  eastbound  it  was 
.)9  per  cent  and  14  per  cent. 

18.  Passenger  hauls  kept  dozen  by  suburban  traffic. 
—The  average  passenger  liaul  is  kept  down  by  the 
amount  of  suburban  tiatfic,  while  in  freight  business 
the  average  haul  has  tended  to  increase  l)ecause  of  the 
long  haul  of  staple  products.  At  the  same  time  the 
suburban  traf.ic,  which  is  normally  handled  on  com- 
mutation rates  based  on  assured  frequency  of  travel 
has  in  recent  years  been  subjected  to  competition 
from  new  methods  of  convevance. 

11).  Commutation  business  as  part  of  railzcai/  earn- 
ings.— In  establishing  comnmtation  rates  the  volume 
of  movement  is  important.  Canadian  railways  do  not 
differentiate  conmiutation  business  in  their  reports. 
The  Boston  and  IMaine  formerly  differentiated  its 
monthly  ticket  business  in  its  reports.  For  the  year 
ending  June  30,  IDKi,  the  railway  earned  .053  cents 
per  passenger  mile  from  comnmtation  business  as 
against  'J.OIO  cents  on  local  business  and  '2.248  on 
interline.  That  is  to  say  the  commutation  business 
earned  per  passenger  i)er  mile  only  32  per  cent  of 
the  local  passenger  mile  earning.  The  commutation 
l)usiness,  however,  represented  11  per  cent  of  the  total 
number  of  passengers  carried.  The  commutation 
Itusiness  affords  a  chance  to  apply  the  wholesale  prin- 
ciple which  is  not  available  in  other  parts  of  the 
|)assenger  business.  The  traffic  moves  in  (juantity  at 
definite  times  and  conse(iuently  the  needs  in  point  of 
rolling  stock  can  be  more  readily  forecasted. 


ri 


lil 


1 1  \l 


I  •' 


i  't' 


224  INLAND  TRAFFIC 

20.  Automobiles  a  feet  passenger  revenue. — The 
rapid  development  of  automobile  traffic  in  the  East- 
ern States  has,  in  recent  years,  affected  railway  pas- 
senger revenue.  In  Canada,  there  has  also  been  a 
rapid  development  of  automobile  traffic.  In  Ontario, 
down  to  1917,  the  number  of  motor-driven  vehicles 
had  doubled  every  two  years  since  1911.  In  1920. 
there  was  one  motor  vehicle  for  every  10  persons. 
The  following  summary  shows  the  number  of  automo- 
biles and  the  ratio  to  population 

Hati(>niot()rs  to 
estimated  population 
1919  19-20  19;20,  oneto  even 

Ontario   Vi9,-2m  177,561  16 

Sasitatchewan    56,40i  60,3-'5  U 

Quebec    ;}1,777  41,562  55 

Alberta   :W,000  38,015  U 

Manitoba    :W,89«  3M55  16 

British  Columbia   31,450  28,000  18 

Nova  Scotia    10,0;W  13,450  49 

New  Brunswiclc    8,061  11,196  34 

Prince  Fdward  Island   . .  1.000  1,419  66 

Yukon  Territory    81  94 

:}3(i,854  407,064 

In  1924  there  were  030,489  motor  driven  vehicles 
registered  in  Canada. 

While  some  part  of  the  motor  traffic  is  undoubtedly 
new  traffic  created  by  the  new  vehicle,  some  portion 
of  it  is  short  distance  traffic  that  would  otherwis( 
have  moved  by  rail. 

While  electric  cars  and  motors  undoubtedly  hiiw 
an  effect  on  short  distance  steam  railway  traffic,  tlu 
extent  to  which  this  is  effective,  while  it  can  be  indi- 
cated, cannot  be  exactly  measured.  One  index  is  tli* 
average  journey.     With  increasing  density  of  popu- 


PASSENGKR    TRAFFIC 


225 


lation,  it  might  be  expected  this  would  mean  a  consid- 
trahle  increase  in  short  distance  traffic,  thus  bringing' 
down  the  average.  The  Grand  Trunk,  running  tlirii 
the  more  densely  settled  section  of  Canada,  where  the 
vompetition  spoken  of  is  keener,  may  be  taken  as  u 
measure.  Here  it  is  seen  that  the  average  varied  but 
little  in  the  period  from  1912  to  1921  inclusive: 


1012  1913  19U  1915  1916 
49 


51 


49 


i9n 

49 


1918  1919  1920  1921 
48 


48 


41 


21.  Differences  between  freight  and  passeugir 
busineas. — In  general,  the  difference  between  freight 
and  passenger  business  is  much  the  same  as  the  differ- 
ence between  carload  and  less-than-carload  business. 
It  is  possible  to  handle  freight  in  a  wholesale  way. 
Passenger  business  has,  except  in  the  case  of  excursion 
and  similar  traffic,  to  be  handled  in  a  retail  way. 

REVIEW 

In  what  respects  do  freight  rates  and  passenger  rates  difFer? 

What  is  the  effect  on  passenger  rates  (a)  of  distance.  (W  of 
time,  (c)  of  stations? 

Why  is  it  easier  to  apply  the  theory  of  ecpial  mih-age  to  passen- 
i;<'r  rates  than  to  freight  rates? 

What  arc  the  im}X)rtant  eU'nients  in  rate-making  for  long-liaul 
l>;isiness? 


■  '!< 

5  I;    -,:      t 


S26 


INLAND  TRAFFIC 


I  i  i 


Do  you  believe  that  the  passenger  department  of  a  railroad  as- 
sists tlie  freight  department  in  gaming  business? 

How  does  an  eeonumic  depression  att'eet  the  passenger  busi- 


ness ; 


Why  is  dead  weight  greater  in  pass-nger  than  in  freight 
business  ? 

Diseuss  the  eommutation  business  of  the  railways,  and  the  in- 
fluences atl'ecting  it. 


!i«KP 


wm 


CHAPTER    XIV 


PASSENGER    RATES 

1.  Passenger  rates  and  the  Raihcai/  Aet  of  Canada. 
—Passenger  tariffs  are  classified  as  standard  and 
special.  Standard  passenger  tariff's  may  express  the 
mileage  they  cover  in  the  same  way  as  in  standard 
freight  tariffs.  Special  tariffs  specify  the  passenger 
tolls  to  be  charger',  when  such  tolls  are  lower  than  the 
standard.  The  re(juir':ments  as  to  the  approval  of 
standard  passenger  tariffs  are  the  same  as  in  the  case 
of  standard  freight  tariffs.  The  re(iuirements  in  re- 
gard to  the  filing  and  coming  into  force  of  sj)eciid 
passenger  tariffs  are  the  same  as  in  the  case  of  special 
freight  tariffs,  except  that  the  public  notice  is  limited 
to  three  days. 

The  Board  is  also  given  a  wide  discretion  based  on 
'the  exigencies  of  competition  or  otherwise"  to  deter- 
mine, notwithstanding  the  provisions  of  the  statute, 
the  time  or  manner  within  and  according  to  which 
publication  of  any  special  tariff  is  to  be  made. 

The  railways  may  grant  free  or  reduced  rates  to  the 
Dominion,  any  provincial  or  municipal  government, 
fairs  and  exhibitions  relative  to  transporting  the 
exhibits,   to  charitable   societies   and   the   necessary 

227 


■^ 


'r' 


i^8 


IxXLAND  TRAFFIC 


agencies  of  such  institutions  in  connection  with  the 
carriage  of  destitute  or  lioineless  persons. 

In  defining  the  services  just  set  out,  the  word  "traf- 
fic" is  used  in  the  Railway  Act.  This  covers  hoth 
passenger  and  freight  business. 

Railways  may  issue  mileage,  excursion  or  conmiu- 
tation  rates,  and  mav  carry  at  reduced  rates  immi- 
grants  or  settlers  and  their  effects  as  well  as  a 
member  of  any  organized  association  of  commercial 
travelers  with  his  baggage.  They  may  carry  at  free 
or  reduced  rates  their  own  officers  and  employes,  or 
their  families,  former  employes  of  any  railway,  mem- 
bers of  the  provincial  legislatures  or  of  the  press, 
members  of  the  Interstate  Commerce  Commission  of 
the  United  States,  their  officers  and  staff,  with  bag- 
gage and  ecjuipment.  The  railways  may  also  carr\ 
free  or  at  reduced  rates  such  additional  persons  as 
the  Board  may  approve  or  permit.  Kxchange  of  fret 
transportation  between  the  principal  officers  of  rail- 
ways is  permitted  in  respect  of  the  carriage  of  their 
officers  and  employes  and  their  families,  or  their  goods 
and  effects. 

The  statute  also  provides  for  the  free  transporta- 
tion as  a  matter  of  right  of  members  of  the  Senate 
and  House  of  Commons,  the  members  of  the  Board 
and  such  officers  and  staff  of  the  Board  as  it  mav  de- 
termine. 

2.  Standard  rates  In  effect. — In  1907,  the  Board 
issued  an  order  requiring  the  Canadian  Pacific  and 
the  Grand  Trunk  to  reduce  their  standard  rat'^s  east 


HP 


PASSENGKU  RATES 


S29 


of  the  Calgary  and  Edmonton  Railway  to  a  cents  a 
mile.  At  the  same  time,  the  other  railways  were  eir- 
culari/ed  to  see  whether  their  condition  would  stand 
the  reduction.  Suhse(iuently,  the  Canadian  North- 
ern, as  it  was  then  called,  redui-ed  its  rates  to  the  .'J 
cent  basis.  The  rates  west  of  the  Calgary  and  Kd- 
inonton  line  remained  at  4  cents. 

Before  the  order  was  issued,  there  were  various 
standards  on  the  different  railways.  On  the  Alhcrta 
Railway  and  Irrigation  Company,  the  standard  was 
:>  cents.  On  the  Algoma  Central  and  on  the  Atlan- 
tic and  Lake  Superior,  it  was  4  cents.  On  the  Grand 
Trunk  (with  the  exception  of  the  line  from  St.  Lam- 
l)crt  Junction  to  Rouse's  Point,  a  distance  of  44  miles, 
on  which  the  rate  was  4  cents)  the  standard  was  'Ma 
cents.  On  the  Canadian  Pacific  in  Manitoba,  the  rate 
was  3  cents;  while  in  Saskatchewan  and  ^Mberta  it 
was  3/{'  cents.  A  similar  condition  existed  on  the 
Canadian  Northern  lines  in  the  West.  On  various 
sections  of  its  lines  east  of  the  Great  Lakes,  the  Ca- 
nadian Pacific  had  rates  of  3,  3Mi,  and  3!l'  cents. 

The  general  standard  rate  in  British  Columbia  is 
4  cents.  Prior  to  1001,  it  was  ."i  cents.  The  matter 
of  the  reduction  of  the  4  cent  standard  was  one  of  the 
(|ucsti()ns  at  issue  in  the  Western  Rates  Case.  The 
Roard  then  found  that  the  operating  expenses  per 
mile  of  line  on  tlie  British  Columbia  division  were  22 
j)er  cent  hig-ic?*  tl.an  the  average  for  the  entire  Ca- 
nadian Paciic  per  mile  of  line,  and  u])wards  of  30 
per  cent  higher  than  the  average  on  the  Prairie  di- 


230 


INLAND  TRAFFIC 


visions.  The  operating  expenses  per  train  mile  were 
found  to  be  54  per  eent  higher  on  the  Hritisli  Colum- 
bia division  than  for  the  entire  line,  and  47  per  eent 
higher  than  on  the  Prairie  divisions. 

Previous  to  the  Judgment  in  the  rate  applieatioii. 
effeetive  September  Vi,  1920,  rates  were  on  a  ihree- 
eent  standard  in  the  territory  east  of  the  Calgary  and 
Edmonton  Line.  Certain  exeeptions  to  the  stand- 
ard were  made  as  follows:  Algoma  Central,  Algoinii 
Eastern,  Quebec  Oriental,  Atlantic  Quebec  and 
Western,  4  cents;  Pas  Division  of  Canadian  North- 
ern, 3^;  Temiscouata,  New  Brunswick  and  Prince 
Edward  Island,  Dominion  Atlantic,  3;\  cents.  These 
exceptions  have  a  mileage  of  1,010  miles.  On  the 
government  railways  the  standard  was  3  cents  except 
in  New  Brunswick  where  it  was  3?,  cents. 

In  the  West  the  British  Columbia  Eastern  had  a 
rate  of  0  cents.  The  White  Pass  and  Yukon  route, 
in  British  Columbia  and  the  Yukon,  had  under  ex- 
ceptional circumstances,  a  rate  of  18  cents  per  mile 
while  the  Klondike  Mines,  a  short  railway  in  tlie 
Yukon,  had  a  rate  of  15  cents  to  20  cents  a  mile. 

The  order  in  the  Fifteen  Per  Cent  Case  permitttd 
standards  to  be  increased  by  15  per  cent,  except  in 
British  Columbia.  Effective  September  13,  11)20 
standard  passenger  rates  were  increased  20  per  cent. 
subject  to  a  maximum  of  4  cents  per  mile.  On  July 
1,  1921  rates  were  reduced  10  per  cent  in  both  east- 
ern and  western  territory. 

3.  Different  kinds  of  passenger  tickets.  —  The  dif- 


'ASSENGKR    KATKS 


231 


ferent  kinds  of  tickets  in  use  on  the  Canadian  Pacific 
may  be  taken  as  typical. 

Mileage  tickets  in  books  of  coupons  covering  1,()()() 
miles  are  issued  east  of  Port  Arthur.  To  he  used  on 
a  train  the  coupons  nuist  first  be  exchanged  for  reg- 
uhir  transportation.  A  ticket  will  not  Iw  honored  if 
lost.  On  a  first-class  one-way  ticket  over  more  than 
one  line,  the  company  acts  as  agent  and  assumes  no 
responsibility  beyond  its  own  lines.  No  stop-over  is 
permitted,  uidess  especially  provided  for.  An  emi- 
grant ticket  is  good  only  for  five  days  from  date  of 
issue  and  for  continuous  passage.  No  stop-over  is 
allowed.  Conductor's  tickets  are  issued  on  the  train 
at  a  charge  of  ten  cents  over  regular  fare,  but  the 
tickets  are  redeemable.  Arrangements  are  also  made 
to  sell  regular  transportation  on  the  train  in  the  case 
'>\'  passengers  getting  on  at  flag,  or  non-agency, 
stations.  The  second-class  ticket  has  the  same  gen- 
eral limitations  as  the  first-class.  Cominutatioii  tickets 
are  issued  in:  10-trip  tickets,  good  for  continuous 
l)assage  only,  with  no  stop-over;  scholars'  4(5-trip 
tickets,  good  only  for  continuous  trip  with  no  stop- 
over, not  good  after  date  of  expiration  even  if  a  j)or- 
tion  is  unused,  and  if  lost,  a  duplicate  will  not  })e 
issued;  .55-trip  tickets  with  same  conditions.  In  con- 
nection with  commutation  tickets,  marketing  stamjis 
are  issued.  These  may  be  used  by  suburban  holders 
ol  .)5-trip  tickets.  They  provide  for  free  transporta- 
tion of  2,5  pounds  of  marketing  in  the  baggage  car  on 
one  day.     3Iarketing  is  defined  as  being  perishable 


IB  lip 


iiiiL...^/i 


Tlli 


J^ 


SB» 


IN  I  AM)    THAFFIC 


I 't' 


[.^ 


table  f(HuI  supplies.  The  tiekets  used  between  Xelsoii 
and  Kooteiuiy  Lauding,  on  tiie  boat,  liave  in  addition 
to  tlie  usual  eonditions  on  first-elass  tickets,  the  eondi 
tion  th  ;c  it'  the  vessel's  legal  earrying  capacity  is  all 
taken  when  the  ticket  is  presented,  then  the  company^ 
habihty  is  limited  to  the  redemption  of  the  uiUL.cd 
portion  of  the  ticket. 

In  the  case  of  excursion  tickets  over  two  or  more 
lines,  such  as  the  nine  months'  round  trip  to  Pacific 
coast  points,  in  connection  with  which  a  series  ot 
options  as  to  routes  is  permitted,  provision  is  made  f<»i 
identification  of  the  passenger.  There  is  also  a  pr«>- 
vision  that  the  return  portion  of  the  ticket  will  not  be 
good  for  passage  unless  validated  by  the  agent  desig- 
nated for  this  purpose. 

Traveling  on  non-passenger  cars  is  permitted  in 
cases  of  emergency  and  on  special  permission  from  tli* 
superintendent  of  the  division,  or  any  higher  otlicial. 
A  release  from  liability  hi:s  to  be  given.  First-class 
fare  is  charged. 

4.  Provisions  for  unused  tickets. — On  all  ti 
tickets  issued  there  is  the  general  condition  that  thc\ 
are  not  transferable.  The  contract  is  a  person.il  one. 
between  the  railway  and  the  passenger.  The  salt 
of  an  unused  portion  of  a  ticket  is  in  Canada,  undi  i 
R.  S.  C,  188(5,  Chap.  110.  s.  s.  7  and  8,  a  Lrimin:il 
offense.  The  railways  make  provision  whereby  a 
wholly  unused  ticket  will  be  refunded  when  presentt<l 
within  sixty  days  after  date  of  expiration  of  ticket  at 
the   ticket   office   where   sold.     (Jnused   portions   ol 


huNtmrn^mfm^mi 


passk\(;i:h  hatks 


S^'J 


louiul-trii)  tickets  will  be  rtluiuled  at  the  ainonnt 
|>ai(I  for  the  tieket,  l«  >s  the  oiu-u.iy  tare.  When 
wiiolly  unused  or  uinised  ntiin,  portions  of  round- 
trip  tickets  are  presented  for  ndemption,  more  than 
sixty  days  aft<>r  the  (hite  of  expiration,  the  matter  of 
redemption  has  to  he  taken  up  with  the  general  pas- 
senger agctjt. 

r>.  UrU's  for  ha(/(/af/c.—'V\\c  ha^^a^a'  rules  i)r<.vide 
that  1.50  pounds  of  haggage,  not  exceedififr  $100  i„ 
value,  will  he  cheeked  without  ehar^rc  for  each  aciult 
passenger,  and  75  pounds,  not  exceeding  .%j()  value, 
for  each  child  traveling  on  a  half  tieket. 

«.  Bdf/f/nf/c  (Ic fined— \V hut  is  covered  hy  haggage 
has  been  Mie  subject  of  judicial  construction';  and 
indication  has,  for  example,  been  given  that  personal 
l)aggage  is  limited  to  clothing  and  such  articles  as  a 
traveler  usually  carries  with  him  for  his  personal  con- 
venience. Disney,  in  'The  I  -aw  of  Carriage  by  Rail- 
way," defines  baggage,  in  a  summary  way,  as  includ- 
ing what  a  passenger  takes  with  hini  for  !  is  personal 
use  and  convenience,  according  to  the  habits  and  class 
"f  life  to  which  he  belongs. 

7.  Uaihauf's  liahilit//  for  ha f/f/af/c— The  liability 
of  the  railway  in  respect  to  the  carriage  of  baggagv 
s  limited  to  a  liability  during  the  time  of  carriagt^  and 
;i  reasonable  time  thereafter  for  delivery.  The  trans- 
portation of  u  passengciV  l)aggage  is  an  incident  of 
the  passenger's  jour  h,  !,»    .,11  f^,^  j^  ^ 

reasonable  time  aft  -jc  <,  =-  «,.  .k 

)vasonai)le  time,    jv  uabilitv   as   insurer 


S34 


INLAND  TRAFFIC 


ceases  and  becomes  that  of  warehouseman  or  bailee. 
Whether  the  company's  hability  will  be  that  of  ware- 
houseman will  depend  on  whether  it  is  entitled  to 
charge  storage  or  not.  The  regulation  in  this  respect, 
as  revised  by  the  Board,  is  "After  the  expiration  of 
twenty-four  hours  from  the  receipt  of  such  baggage 
or  articles  in  storage,  the  carrier  shall  be  liable  as  a 
warehouseman  only." 

8.  Storage  charges. — When  baggage  is  uncalled 
for  after  a  certain  time,  storage  charges  are  imposed. 
The  railways  state  that  the  charge  is  not  imposed  with 
a  view  to  making  a  profit,  but  as  a  deterrent.  Their 
facilities  are  too  expensive  to  justify  their  engagin<; 
for  profit  in  the  warehousing  of  baggage  at  the  rates 
charged.  At  first,  storage  charges  were  on  inbound 
baggage  only:  but  it  was  found  that  outbound  bag- 
gage was  at  times  left  for  a  considerable  period;  so 
storage  charges  were  made  to  apply  in  both  directions. 

After  the  lapse  of  twenty-four  hours  free  time, 
storage  is  charged  on  ])aggage  remaining  at  station^ 
or  wharves.  Twenty-five  cents  is  charged  for  the  see- 
ond  day  of  twenty-four  hours  or  portion  thereof,  in- 
cluding the  preceding  day.  For  each  additional  day. 
or  portion  thereof,  including  preceding  days,  there  is 
an  added  charge  of  10  cents  until  with  the  ninth  day 
a  charge  of  9.5  cents  is  reached.  For  the  tenth  dav 
and  to  the  end  of  the  month  the  charge  is  $1.  For 
subsequent  periods,  the  maxinmm  charge  is  $1  per 
month. 

9.  Initial  carrier  liable  for  baggage. — In  the  re- 


PASSKNGKR    RATES 


235 


vision  of  the  baggage  rules  in  1915,  the  provision  was 
added  that  where  baggage  moves  over  two  or  more 
lines,  subject  to  the  jurisdiction  of  the  Board,  tiie 
checking  carrier  is  liable  for  the  loss  or  (himage  (hie 
to  a  connecting  carrier  and  shall  have  its  recourse 
against  each  connecting  carrier.  This  enables  the 
passenger  to  deal  with  the  initial  checking  carrier,  in- 
stead of  trying  to  ascertain  who  is  responsible  and 
then  following  the  matter  up. 

10.  Baggage  handled  in  Toronto.— A  special  study 
made  in  connection  with  the  plans  of  the  new  Unioli 
Station  in  Toronto  showed  that  in  one  year  there 
were  on  the  average  4,400  pieces  of  baggage  handled 
per  day.  One-quarter  of  this  total  was  made  up  of 
hand  baggage.  A  check  of  traffic  taken  for  one  day, 
showed  approximately  one  in  every  eight  passengers 
had  baggage  checked.  In  the  period  1900-1912,  the 
pieces  of  baggage  handled  at  Toronto  increased  93 
per  cent. 

11.  Parcels  checked  at  Toronto.— Vnrcel  checking 
is  one  feature  of  the  activity  of  the  modern  passenger 
station.  At  Toronio,  there  are  1,000  parcels  checked 
per  day. 

12.  Baggage  carried  bi/  raihcat/s-.— The  returns  do 
not  show  what  amount  of  baggage  is  carried.  If  it  is 
assumed  that  the  average,  as  shown  at  Toronto,  applies 
generally,  then  taking  heavy  baggage  as  averaging 
100  pounds  per  piece,  the  railways  carried  in  1915  at 
least  240,000  tons  of  baggage.  In  various  countries,  a 
considerable  revenue  is  o!)tained  from  baggage  carried. 


.lb 


2^6 


INLAND    TRAFFIC 


13.  Sleeping-car  service. — The  sleeping-car  ser\- 
ice,  which  is  now  regarded  as  one  of  the  necessary 
comforts  of  long-distance  traveling,  has  been  con- 
nected with  Canadian  railway  travel  since  Confedera- 
tion. The  first  Pullman  car,  the  "President,"  was 
put  into  operation  on  the  Great  Western  Railway  in 
1867.  It  was  a  combination  sleeper  and  kitchen  witli 
portable  tables.  When  the  Pullman  Company  oper- 
ates the  service  under  contract,  as  on  the  Grand 
Trunk,  the  arrangement  is  that  if  less  than  a  sum  set 
out  in  the  contract  is  earned  per  car  per  annum,  the 
railway  pays  mileage.  When  this  guaranteed  sum  is 
reached  no  mileage  has  to  be  paid.  When  a  certain 
fixed  sum  is  exceeded  then  the  railway  receives  one- 
half  of  the  excess.  In  the  case  of  the  Canadian  Pa- 
cific, the  Great  Northern,  the  Canadian  Northern, 
and  the  Grand  Trunk  Pacific,  the  sleeping  cars  air 
operated  by  the  railways  themselves. 

The  rate  basis  of  sleeping-car  tariffs  is,  east  of  Cal- 
gary, 7.2  mills  per  mile,  with  20  per  cent  off  on  upper 
berths.  West  of  Calgary  the  basis  is  9.6  mills  per  mile. 
with  the  same  reduction  for  upper  berths.  The  par 
lor  car  rates  are  based  on  a  charge  of  5  mills  per  mile 
east  of  Calgary,  and  two-thirds  of  one  cent  per  mile 
west  thereof.  Effective  September  13th,  1920,  under 
the  judgment  in  the  General  Rate  Application,  tiie 
basis  was  increased  by  50  per  cent  and  December  1. 
1921  this  increase  was  reduced  to  25  per  cent. 

14.  Classified  passenger  rates. — While  the  matter 
of  ability  to  pay  is  recognized  in  passenger  rates,  il  iy 


■:mrrsm?'\!jiiHaJt^'w.'-^9ssa^ri^!:^.i'f^y<agwimK^  -j  .^.ys^sifTf^^.rj^mfismi^.  TT^w^.^sm^s 


PASSENGER  HATES  gar 

not  organize,!  in  the  same  way  as  in  freight  business 
lassenKer  rates  average  t,.  a  greater  extent,   tl,„, 
<lo  freight  rates,  .liffering  c<m(liti„ns  .,f  travel  a„„ 
j)assengers. 

The  raiJ.vay  between  Montreal  and  Laehine,  ul.idi 
^vas  opened  in  1847,  had  the  Kn^Ush  stvie  of  eonmart- 
inent  cars-the  first,  seeond  and  thinl-elass  aecnn- 
n.odation  being  supphed  on  the  one  e.r.  The  eharter 
ol  the  errand  Trunk,  nnder  the  influenee  of  the  move- 
ment whi  eh  euhninated  in  England  in  the  provision 
tor  Parl.anientary"  trains,  provided  for  a  third-eJass 
serviee  l)etween  Toronto  and  Montreal  «  the  rate  of 
one  penny  per  nnle.  The  Privy  Coun.n  has  stated 
that  this  provision  is  still  binding. 

Hut  while  in  Canada  it  was  apparentlv  assumed 
that  passenger  traffic  would  be  divided  into  three 
classes,  sueh  a  development  has  not  taken  ,)laee. 

1  he  Railway  Act  does  not  provide  for  seeond-elass 
tares.     In  eastern  Canada,  second-elass  fares  grew  up 
as  a  measure  of  segregation  in  connection  with  the  cir- 
nage  along  the  Lakes  and  the  St.  Lawrence  of  the 
""'«)er  jacks,   Indians,  and  others  workino-  as  d-.v 
'•'|'»>i-ers  m  the  lumber  industry.     These    -.aes  wcit 
also   used   in   connection    with   colonization.     While 
ti'ev  were  used  on  the  original  (irand   Trunk   line 
and  were  later  met  by  the  Canarlian  I'acific  in  com- 
petition, they  are  not  in  general  use  in  c:.stem  Canada 
Second-class  rates  from  eastern  to  western  Canada 
|vere  also  put  in  to  aid  colonization  and  settlement 
it  .s  contended  by  the  railways  that  the  need  for  the 


i.- 


f$ 

1 

'm 

,\ii 

l| 

\\  m 

Hi 

it: 


H>»-.3ifi.iuii 


mk 


238  INLAND  TRAFFIC 

second-class  rates  for  this  purpose  has  passed,  as 
there  is  not  any  considerable  movement  of  colonists 
from  eastern  to  western  Canada.  Most  of  the  movt- 
ment,  it  is  stated,  is  of  immigrants  from  either  Eurojjt 
or  the  United  States  who  move  on  special  fares,  in 
many  cases  lower  tlian  second-class.  Second-class 
rates  are  in  force  from  practically  all  points  in  eastern 
to  all  points  in  western  Canada.  As  an  example  of 
the  relation  of  the  rates,  the  first-class  limited  ticket 
from  Ottawa  to  Calgary  is  $72.40;  while  the  second- 
class  is  $67.40.  In  general,  from  points  intermediate 
to  Winnipeg  and  Vancouver.  *'iere  are  no  second-class 
rates  east  of  Winnipeg.  Formerly  there  was  ;i 
blanket  seccmd-class  fare  from  Vancouver  to  Winni- 
peg to  meet  American  competition.  This  has  been 
c;  Mceled.  In  general,  the  railways  take  the  position 
that  second-class  rates  are  an  unnecessary  survival. 

So  far  as  Canada  and  the  Ignited  States  are  con- 
cerned, it  may  be  said  that  in  reality  the  Pullman  i> 
the  first-class  and  the  standard  first-class  car  tlit 
second-class. 

1.3.  PaHsciicfcr  classes  in  Europe. — In  Europe,  tlie 
])ractice  of  having  three  classes  and  even  foin-  j)r(  - 
vails.  The  following  tabular  sununary  as  to  the  j)er- 
centage  of  passengers  by  classes  in  various  countrits 
is  of  interest:' 

12  3  4     Militin 

Austria    O.t  5.8  92.7        ...  M 

Francf    4.0        19.0  77.0       

G.-rmanv    n.l  7.4  42.:?      49,0  !..' 

1  Tlif  comparisons  jrivon  are  on  a  pre-war  liasis. 


I 


FFT*r>*aRT 


.Fitrrit  -\w.': 


"TS^T^SS'. 


ri«v. 


^T' 


■8R 


PASSENGER  KATES  239 

I  -'  :t  i     Military 

India     ()..»  0.7  ;.>.7         Kjm 

.lai>flll      ().:J  l.i  )).-,.;{ 

Liiited   Kingdom    j.7  ;{.!)        yd.t 

In  the  case  of  passenger  business,  as  in  the  ease  of 
freight  business,  it  is  praetieally  impossible  to  make 
any  comparisons  of  vahie  between  conditions  abroad 
and  conditions  on  tliis  continent.  Tliere  is  hiek  of 
a  conmion  detiominator. 

IG.  Clam'  rates  in  forcifjn  countries. — In  the  mat- 
ter of  rates,  the  low  averages  of  various  foreign 
countries  are  due  to  a  type  of  travel,  third-class  or 
even  fourth-class,  which  is  not  found  on  this  coiiti- 
iient.  Examination  of  the  first-class  rates  will  indi- 
cate that  they  average  higher  than  the  corresponding 
rate  on  this  continent.  Average  receipts  i)er  pas- 
senger, per  mile,  are  set  out  in  the  following  table  with 
also  a  class  differentiation  for  France  and  (iermanv: 

AvtTiifrf  fit  re 
in  (viits 

Allchivses      I  2  ^  i         .Military 

Austria   1.(17!)  .... 

I'rantr    l.()()H  2A2.i         \:.{T.i  .S!)l  ,,] 

^''^'lany    JHW  J.mn         l.,i70  .!»sl  .7()!»  .:{S7 

India    tl J  

•litpfin    (iS;}  "  [ 

I'nited  Kinfrdom    ..    1.,j1  

t'inada    J.02] 

L  iiited  Statf.s   J.OI.i  ....  

\7.  .Ivcragc  hauls  in  forcic/n  countries. — AVhere 
the  average  haul  is  short,  it  is  apparent  that  a  lower 
standard  of  comfort  or  convenience  is  re(|uired  in  con- 
nection  with    the   accommodation    supplied.     There 


!  ( 


u;r.^a!!F^ 


5»40  INLAND  TRAFFIC 

was  :i  time  in  England  when  tliird-class  traffic  moved 
in  open  cars,  the  passeng'ers  being  seated  on  their  bag- 
gage. In  Germany,  the  fourth-chiss  traffic  is  sub- 
jected to  a  degree  of  discomfort  whose  ordy  paUiativt 
is  its  economy.  The  following  table  of  average  hauls 
is  of  interest : 

A  vera};*' 
all  flasso^        1234       Militan 

AiiNtrii    1( 

l-'ranc.     .'I  10  22  20 

(HTiiiam     U  100  18  1;{  l.»  .jl 

India     X't 

I'liitt'd   Kingdom   K 

Canada '.I 

I  iiited   States    39 

While  with  lower  standards  of  comfort  and  lower 
earning  power,  money  is  more  highly  estimated  than 
personal  comfort,  still  from  the  standpoint  of  personal 
sacrifice  it  is  true  that  the  native  of  India  in  paying 
tive-tenths  of  a  cent  per  mile  is  making  a  heavier  pro- 
portionate deduction  from  his  income  than  the  avei - 
age  passenger  in  Canada  or  the  United  States  who 
l)ays  a  fraction  over  three  cents. 

18.  Pas'.scnc/crs  per  train  /»  forcic/n  count ricH.- 
Wliether  traffic  will  move  in  third  or  even  in  fourtli- 
class  accommodation  in  a  particular  country  depends 
on  the  length  of  the  journey,  the  services  and  con- 
veniences demanded,  and.  above  all,  on  the  generjil 
standard  of  economic  well-being.  Reference  has  been 
made  to  the  large  amount  of  dead  weight  hauled  jxr 
pas.senger  in  Canada.  As  indicative  of  the  greater 
utilization  of  space,  the  number  of  passengers  per 
train  as  set  out  in  the  following  table  is  of  interest: 


^vr-.BHiM'S  ".^SIJJl-X 


'7Sf^.#ia««  4Cii|.ES!L&lL.'aL''» 


•Ai!f.  *L,A  ^V  tMi^  ZA'&'VjC-.^t.X&fLr^ 


PASSK\(ii:il  KATKS 


241 


Austria    73     India 


Franc( 


ro    ( 


anada 


18J3 


(ii'niiaiiy Hi      Tnitcd  Stato 47 

19.  Zone  tariff  st/,st cm. —As  a  iiicims  of  mluctioii 
of  passenger  rates,  the  "zone"  tariff*  system  of  limi- 
tary, >vliieh  was  adopted  in  1881),  was  hailed  011  its 
iiitrochietioii  as  a  revolutionary  ehan^e.     As  a  mat- 
ter of  origin,  it  may  he  said  tliat  a  New  Zealander, 
Samuel  V'aile,  claims  that  this  idea  was  first  developed 
m  his  "stage"  system  of  rate-making  in   1882,  and 
from   it    adopted    in    Hungary.     The    Z(.jie    system 
was    worked    out    on    the    hasis    of    fourteen    zones 
which  increased  in  size  as  the  distance  from  Budapest 
increased.     Within  each  zone  there  was  a  Hat  rate. 
In  i-eality,  instead  of  computing  rates  on  a  mileage 
basis,  the  zone  or  fixed  numher  of  miles  was  taken  as 
the  unit.     The  idea  was  to  develop  longer  distance 
traveling.     To  the  extent  that  it  was  su.'cessful  in 
this,  the  siorter  hauls  were  helping  to  pay  for  the 
longer  hauls.     The  difficulties  which  have  arisen  as 
to  journeys  between  points  in  two  zones,  such  points 
heing  located  near  the  boundary  of  the  two  zones,  have 
lieen  such  that  various  modifications  have  been  intro- 
duced so  that  it     ;)W  1  iffers  but  little  from  the  ordi- 
nary distance  basi.. 

The  zone  system  is  used  in  connecticni  with  street 
railway  traffic  in  the  Ignited  Kingdom  as  distin- 
guished from  the  flat-rate  system  lor  the  total  dis- 
t.mce  which  has  been  used  in  Canada  and  in  the 
I'nited    States.     In    England,    the    Great    Central 


juMki 


24s: 


INLAND  TRAFFIC 


adopted  in  steam-railway  travel,  in  1907,  the  zone 
system  in  the  Manchester  and  Sliettield  district.  But 
the  situation  here  was  different  from  that  in  Hun- 
gary, for  here  the  adoj)ti()n  of  the  zone  system  was 
concerned  with  short  (hstance  traffic  which  had  to 
meet  electric  railway  competition. 

20.  Methods  used  in  Europcuii  passenger  rates. — 
The  methods  of  huilding  passenger  rates  adopted  on 
the  Continent  of  Europe  are,  in  general,  of  three 
kinds:  the  strict  distance  tariff,  for  example,  in  Ger- 
many, ',\hen  the  fare  is  so  many  pfennigs  for  each 
class  for  each  kilometer  traveled;  the  tapering  tariff, 
as  in  Italy,  under  which  the  charge  per  kilometer  de- 
creases as  the  distance  increases;  the  zone  system,  a 
tapering  tariff  under  which  the  rates  are  the  same  to 
all  stations  within  a  particular  zone,  radically  decreas- 
ing to  the  stations  in  the  next  zone.  In  Germany,  the 
situation  may  be  summarized  by  saying  that  the  pas- 
senger pjiys,  first,  the  ticket  rate;  second,  an  extra 
charge  for  the  use  of  an  express  train;  third,  a  ticket 
tax:  fourth,  a  fee  for  registering  any  baggage  whicli 
is  not  carried  bv  hand. 


UK  VIEW 

Wliat  is  the  dittV'rciioe  between  standard  and  special  pa>>- 
seng'T  tariff's?     Wliat   special  tariff's  may  the  railways  niake' 

Describe  the  ticket  regulations  of  tlie  Canadian  Pacific  Rail- 
Way  ? 

What  does  baggage  include?  What  is  the  liability  of  tin- 
carrier  with   regard  to   it? 

Under  what  conditions  is  sleeping-car  service   furnished? 

Discuss  passenger  classification  in  eastern  and  western  Can- 
ada. 


CIIAl'TKU  XV 


coNTK.UT  or  cahhia(;k 


iTi 


1.  Common  laze  ohlKjatiom  of  the  ruihcai/s. — Tlie 
cominoii  law  which  apphed  to  the  earlier,  simpler 
forms  of  carriage  has  heeri  made  applicable,  except 
in  so  far  as  it  has  been  modified  by  statute,  to  the  rail- 
way which  is  today  the  most  striking  example  of  the 
common  carrier. 

Hutchinson,  in  his  work  on  "Carriers,"  has  defined 
a  common  carrier  as  follows: 

A  common  carrior  or  public  carrier  i-  one  who  under- 
takes as  a  business,  for  hire  or  reward,  to  carry  from  one 
I)hicc  to  another  the  goods  of  all  persons  who  may  applv 
for  such  carriage,  provided  the  goods  are  of  the  kind  wiiich 
lie  professes  to  carry  and  the  person  so  aj)plving  will  agree 
to  have  them  carried  upon  the  lawful  terms'  prescribed  bv 
the  carrier;  and  who  if  he  refuses  such  gojxis  for  those 
who  are  willing  to  comply  with  his  terms  Incomes  liable  to 
nn  action  by  the  aggrieved  party  for  such  refusal. 

It  was  decided,  as  early  as  1700,  that  the  common 
carrier  was  liable,  as  an  insurer,  for  all  goods  which  he 
undertook  to  carry.  In  general,  the  position  of  tlie 
common  carrier  at  common  law  may  be  summarized 
jis  follows: 

He  was  liable  as  an  insurer  of  the  goods,  except  in 
cases  arising  from — 

243 


avi 


INLAND  TRAFFIC 


(a)  An  act  of  (iod. 

(b)  An  act  of  the  Kind's  enemies. 

(c)  An  act  of  public  authority  (e.  ^.,  (luurantine). 

(d)  An  act  of  the  shipper. 

(e)  Inlierent  vice  or  defect  in  the  «;()od.s. 

iVll  these  exceptions  liave  been  the  subject  of  ju- 
(hcial  definition,  items  a,  I),  d  and  e  are,  however, 
subject  to  the  condition  that  tlie  ne^hgence  of  the 
carrier  did  not  concur  therein.  Xeghgence  is  in  hnv 
the  omitting  to  do  something  that  a  reasonable  person 
would  do,  or  doirjg  something  that  a  reasonal)le  per- 
son would  not  do.  While  carriers  are  insurers  as  to 
freight,  in  the  case  of  passetjgers  they  are  liable  only 
for  negligence. 

iVt  common  law,  as  soon  as  goods  were  delivered  to 
the  carrier,  he  had  the  risk  of  safe  custody  as  well  as 
the  duty  of  carrying  as  directed.  His  liability  did 
not  rest  on  contract.  However,  it  was  in  time  estab- 
lished that,  in  consideration  of  a  reduced  rate,  Ik 
might  limit  the  common  law  liability  by  special  con- 
tract, providing  such  contract  was  not:  (a)  contrarv 
to  an  express  provision  of  law;  (b)  contrary  to  pub- 
lic policy;  (c)  unjust  or  unreasonable. 

When  the  contract  of  carriage  of  the  carrier  was 
terminated  and  the  goods  remained  in  the  possession 
of  the  carrier  as  a  warehouseman,  he  was  no  longer 
liable  as  an  insurer,  his  liability  for  loss  or  damage 
being  dependent  on  some  negligence  on  his  part  beiiiy 
shown.  Before  the  days  of  railways,  it  was  estal)- 
lished  that  while  carriers  of  goods   were  insurers, 


CONTHACT  OF  CARHIAr,i: 


nry 


carrit'i's  of  passtii^ers  weir  linlilc  only  f'oi*  ru;»li^t'iK'f 
in  tlu'  |K*rf()niia?u'c  of  their  eoiitraets. 

•J.  /////  of  laditif/  and  it.s  fondititnis.  -  As  an  iiiei- 
(Iriit  of  the  neeessary  eontraetiial  relations  of  the 
shipper  and  the  railway,  there  eanie  into  exisleiiee  a 
hill  of  lading-  settin«»'  out  the  eonditions  of  earria^e  and 
the  liahilitv  of  the  railway  thereunder. 

The  Railway  iVet  of  Canada  provides  that  no  eon- 
traet,  eondition  or  hy-law,  re<»ulation,  deelaration  or 
notiee  limiting'  the  liahility  of  a  railway  in  ''espeet  of 
the  earria^e  of  any  tratfie  is  to  he  valid  uidess  ap- 
proved hy  the  Hoard,  an<l  the  Jioard  is  empowered  to 
define  the  extent  to  whieh  sueh  liahilitv  niav  he  lini- 
ited.  The  Privy  Couneil  has  deeided  that  the  Hoard 
has  j)ower  to  authori/e  a  eontraet  relievino-  the  rail- 
way from  liahility  to  one  traveling-  at  a  redueed  rate, 
for  example,  in  ehar^e  of  livestoek,  for  injuries  eaused 
thru  the  negli^eiiee  of  the  railway.  While  the  rail- 
way is  a  eommon  earrier,  whose  liahility  has  heen  fur- 
tiier  defined  hv  statute,  it  mav  refuse  to  take  anv 

•  •  • 

paekage  or  pareel  whieh  it  suspeets  to  eontain  goods 
')f  a  dangerous  nature,  or  may  recpiire  the  same  to  he 
opened  to  aseertain  the  faet.  It  is  not  permitted  hy 
the  statute  to  earry  goods  of  a  dangerous  nature,  ex- 
cept in  ears  speeially  designated  for  that  puri)ose. 
Hy  an  order  of  the  Hoard  issued  .Tatiuary  1(5,  lOl.'}, 
tiie  regulations  under  whieh  explosives  might  be  re- 
ceived, forwarded  and  deli\ered  were  defined. 

In  1909,  as  a  result  of  a  series  of  conferences  be- 
tween representatives  of  the  shippers  and  of  the  rail- 


Iff 


rt^^s^st  asij.^S 


!■'*'    ^H     *Jt 


aui 


INLAND  THAFFK 


ways,  a  ufiitorm  hill  of  Jading  applicalMe  to  Canadian 
traffic  was  (Irattt-d  and  approved  l»y  tlic  Hoard.     'V\u 
provisions  of  this  may  hv  sununan/cii  under  the  t'ol 
lowin;^  eharaeteristie  lieadin^s. 

li.  Liohilif/f. —  in  general,  the  railway  is  an  insurer. 
The  limitations  of  its  liahility  are  speeitieally  set  out. 
If  is  not  liahle  in  eases  covered  hv  the  various  eonunon 
law  defenses.  Nor  is  it  lial  '  for  h)ss,  damage  or 
<lelay  due  to  differences  in  the  wei«iht  of  ^raiti  or  othei 
commodities  caused  l>y  natural  shrinkage  or  discrep- 
ancies in  elevator  weights,  a  hen  such  elevators  are  not 
operated  hy  the  carrier,  nnlf-.s  the  weiufhts  are  evi- 
denced hy  government  certificattM  tior  for  any  los^ 
damage  or  delay  due  to  th(  auiliority  of  law  or  ol 
<iuarantine  detention.  It  is  liahle  only  for  iiegligenet 
when  goods  are  stopped  in  transit  at  the  re([uest  ol 
the  party  entitled  to  make  such  re(|uest;  or  when,  in 
accordance  with  general  _ustom,  the  goixls  are  carric! 
in  open  cars. 

When  goods  are  carried  at  "owner's  risk,"  the  shij 
per  assumes  the  risks  incidental  to  transportation,  the 
railway,  however,  heing  liahle  for  negligence. 

Except  in  case  of  diversion  from  a  rail  to  a  water 
route,  goods  carried  hy  water  over  any  portion  of  the 
journey  are  subject  to  the  provisions  of  the  statute 
and  of  the  hill  of  lading;  provided,  however,  that  in 
resj^-ct  of  the  water  route,  the  carrier  is  not  liahle  foi- 
any  loss  or  damage  resulting  from  the  perils  of  the 
lake,  sea  or  other  water;  or  from  any  accident  u^ 
navigation  or  the  prolongation  of  the  voyage. 


CONTUACT  OP  CAUIUACii: 


«47 


$ 


The  company  is  not  liaMe  for  loss  or  darjiage  aris- 
ing from  any  (langennis  article. 

ruder  the  hill  of  lading,  as  existing  hefore  1000, 
tlie  eonipany  assumed  no  liahility  ott'  its  own  lines  and 
acted  only  as  the  agent  of  the  owner  ott"  its  own  lines. 
Tnder  the  preserjt  hill,  in  the  ease  of  a  movement 
from  one  point  to  another  in  Canada,  or  when  goods 
are  earried  on  n  joint  tariff,  the  initial  earrier  is  liahk 
in  res|)eet  (»f  any  loss  or  damage  oeenrring  on  the  lines 
(if  a  eonneeting  earrier,  and  frem  which,  such  ecm- 
rieeting  carrier  is  not  exempt  undi  r  the  provisions  of 
tiie  hill  of  lading,  the  onus  heing  on  the  initial  earrier. 
The  latter  is  entitled  to  recover  from  the  connecting 
earrier.  The  i)erson  aggrieved,  however,  retains  any 
right  of  action  he  may  have  against  the  initial  or  the 

uineeting  carrier. 

The  American  rule,  as  set  out  in  the  earlier  deei- 
.IV  was  that  for  a  carrier  to  be  liable  in  respect  of 

V  tion  of  the  thru  movement  which  was  off  its  own 
t'lcre  must  be  a  positive  agreement,  either  ex- 

V  »>••  implied,  extending  the  liability.     In  the  Kng- 
u  rule,  the  position  was  different.     When  the  carrier 

accepted  for  a  thru  movement  to  a  point  off  its  own 
line  on  the  line  of  a  connecting  carrier,  the  first  or 
rontracting  carrier  became  liable  no  matter  by  whom 
the  goods  nnght  be  lost:  it  became  exclusively  respon- 
sible and  it  alone  could  be  used  by  the  aggrieved 
person.  Any  attempt  to  hold  the  subsequent  or  con- 
necting carrier  liable  for  this  loss,  altho  it  might  have 
happened  from  its  negligence  or  fault,  would  fail  be- 


pmm 


iri.  i«.t  ~ 


MS 


INLAND  TRAFFIC 


cause  of  the  want  of  privity  or  eontraet  between  siuli 
carrier  and  the  injured  party.  It  was,  of  eoursr. 
open  to  the  carrier  to  safe<ifuard  itself  by  special  con- 
tract. 

When  the  carrier  limited  its  oblif>ation  by  contract 
so  that  it  acted  only  as  the  agent  of  the  shipper  in  re- 
spect of  the  movement  off  its  own  line,  it  was  naturally 
a  difficult  matter  for  the  shipper  to  localize  the  cans* 
oi  loss  and  determine  against  whom  action  shouhl  h* 
brought. 

4.  Insurance. — When  any  pers(m  is  reimbursed  on 
account  of  loss  or  damage,  the  carrier  may  have  tlu 
advantage  of  the  insurance  in  effect  upon  such  goods, 
subject  to  its  reimbursing  the  perscm  so  assured  for 
the  premium  paid. 

.5.  lAahiUty  us  a  tcarchouscman. — The  railway  is 
not  liable,  except  as  a  warehouseman — in  which  c.i- 
pacity  it  is  answerable  for  waiit  of  reasonable  care 
for  loss,  damage  or  <lelay  caused  by  fire,  occurrinu 
forty-eight  hours  on  general  traffic,  and  seventy-two 
hours  on  bonded  goods,  after  written  notice  of  tlu 
arrival  of  the  goods  at  destination  has  been  sent  or 
given.     Hoth  these  time-periods  are  exclusive  of  Icg.il 
holidays.     After    these    periods    have    ex|)ire(l.    tli< 
goods  may  be.  on  the  w.irchouscmiurs  liability,  kcjit 
in  the  car,  station  or  place  of  delivery,  subject  t<> 
reasonable  storage  char<>cs:  or  the  goods  may  be  re- 
moved to  a  ])ublic  or  licensed  warehouse  and  thcrt 
held  at  the  owner's  cost  and  risk  until  he  sees  fit  to 
remove  them. 


vm^^m 


COXTHACT  OF  CAKHIAGK 


2IJ) 


(J.  W archoiiHC  defined. —  'Warehoiisc  or  shed 
fVt'i^lit"  refers  to  less-tliaii-carload  traHk-  usually 
liaiulled  in  the  warehouses  of  the  eonipanv,  iiu-ludintr 
re«.ular  freight  sheds  and  auxiliary  warehouses  owned 
and  operated  by  it,  but  not  warehouses  whieh,  tho 
erected  on  the  lands  of  the  company  are  not  owned 
or  operated  by  it,  nor  wareb.ouses  uv  other  buildings 
the  property  of  the  company,  but  leased  to  other 
parties.  The  commodities  so  defined  are,  after  free 
time,  held  in  the  company's  warehouse  at  owner's  risk 
of  loss  or  damage,  e.\ee|)t  loss  or  damage  from  fire, 
uidess  caused  l)y  invasion,  insurrection,  riot,  civil  com- 
motion, militarv  or  usurped  nower. 

>  I  A 

1.  Storage  and  demurraye  (7/r//Y/c.v.  -Carload 
freight  received  in  cars  and  subseejuently  unloaded 
(HI  the  prenn'ses  of  the  company  is  subject  to  demur- 
rage rules  while  in  cais,  and  to  storage  charges  aftei- 
lieing  uidoaded.  Tnder  the  former  bill,  the  responsi- 
liility  of  the  railway  ceased  when  the  goods  were 
|)lace(l  in  the  company's  sheds  or  wareln)uses  at  desti- 
nation, and  storage  charges  ran  from  twenty-four 
liours  after  arrival. 

H.  Lo.v.v  or  dnnifif/e. — Loss  or  damage  is  <*omputed 
on  tlie  basis  of  the  value  of  the  goods  at  the 
place  and  time  of  shipment,  |)lus  freiglit  and  duty,  if 
any.  j)aid,  uidess  a  lower  value  has  been  declared,  in 
whk'h  ease  the  lower  value  governs,  even  if  the  loss  or 
•  lamage  is  due  to  negligence. 

Xotice  must  be  given,  in  writing,  to  the  railway 
either  at  the  point  of  origi-'  ora^  the  point  of  delivery. 


' '  m'^ 


250 


INLAND  TRAFFIC 


within  four  months  after  the  (lehver\  of  the  goods:  in 
case  of  faihn-e  to  make  dehvery,  notice  must  l)e  «^iveii 
within  four  months  after  a  reasonahle  time  fi»r  (leU\ - 
ery  has  ehipsed.  Uni'  /  the  old  l)dl,  chiims  for  dam- 
ages or  \os  liad  to  l)e  presented  at  the  nearest  phur 
of  dehverv  within  thirtv-six  hours  after  dehverv  of 
tlie  goods. 

9.  Pat/mcnt  of  charges. — The  owner  or  consigns 
may  pay  freight  either  hefore  or  after  dehverv. 
Under  the  old  hiJl,  the  charges  had  to  he  paid  hefor( 
(iehvery.  While  tiie  railway  may,  in  practice,  give  ;i 
jjeriod  of  credit  for  the  settlement  of  such  charges  it 
is  not  under  legal  ohiigation  to  do  sc. 

The  Railway  i\ct  provides  that  on  refusal  to  pay 
tolls  they  may  he  recovered  in  any  court  of  competcii^ 
jurisdiction.  Instead  of  hringing  action,  the  railway 
mav  seize  the  "oods  and  hold  them  at  the  risk  i)f  tli( 
owner  as  security  ff)r  the  payment  of  the  chargc>. 
If  the  tolls  are  not  paid  within  six  weeks,  the  railway, 
after  advertisement,  sells  the  goods,  reimhursing  itseli 
out  of  the  proceeds.  If  the  goods  reniain  in  the  pos- 
session of  the  railway  unclaimed  for  six  months,  it 
may,  after  public  notice,  sell  the  gcKxls,  reiml)ursiim 
itself  out  of  the  proceeds.  If  the  halafice  remains  un- 
claimed after  three  months,  it  is  to  he  deposited  with 
the  Minister  of  Finance  for  the  public  use. 

10.  Farms  of  the  hill  of  /r/r////</.— The  bill  (»f  iadiiii,' 
has  three  sets  of  documents:  (a)  the  original  bill  ol' 
lading:  (1))  the  shipping  order;  (c)  the  memoran- 
dum: a  and  c  are  for  the  shipper;  b  is  for  the  laihvay. 


CONTRACT  OF  CARHIACiK 


251 


Tlie  railway  practice  is,  when  claims  arc  niadr,  to  rc- 
(piire  the  surrciulcr  of  the  ori^rinal  l)ill  of  hnlmu-. 
This  serves  two  purixises;  heiiiw-  the  original,  it  re- 
.(uires  no  verification:  and,  bcii.o-  in  tlie  company's 
possession,  it  cannot  he  wronn-rnily  a|)pn»priate(l  hy 
any  person  who  nii«rlit  otherwise  use  it  ,is  •»  hasis  lor 
repeating  the  chiini 

There  are  two  !>ills  of  hi(hn«4  the  strai<,dit  and 
the  order  hill.  The  papers  concerned  with  the 
strai<^ht  hill  are  printed  <»n  white  paper;  the  order  hill 
IS  printed  on  yellow  paper,  while  the  shippinii  order 
:ii!d  niemorandiini  are  printed  <m  blue  paper.  The 
hill  of  ladino-  has  a  uniform  size,  viz.,  cS^  inches  hy 
1 1   inches, 

\Vhen  the  "order"  hill  is  used,  it  is  for  transactions 
iie«.{()tiated  thru  the  hanks.  For  example,  an  On- 
tario ^rain  dealer  may  sell  to  a  firm  in  Toronto.  lie 
draws  a  draft  either  on  si<^ht  or  demand  on  his  con- 
si^niee,  and  attaches  this  draft  '<•  the  hill  of  ladiiiir 
which  carries  title  to  the  broods.  Tlis  hank  will  he 
iii>tructed  to  hoM  the  document  until  the  draft  is  paid. 
Tlie  net  amount  of  the  draft  ^oes  at  once  to  the  credit 
of  the  dealer's  acrount.  Then  the  hank  owns  the 
draft.  Jt  forwards  the  draft  and  hill  of  ladino-  to 
loronto.  The  Toronto  firm  must  j)ay  the  draft  in 
onler  to  oet  possession  of  the  hill  of  lading-,  which  is 
it^  title  to  the  <4rain. 

The  hulk  orain  liill  j^  an  "order"   hill  w  jth  the  same 
i4<'neral  terms  as  have  heen  summarized  above. 

In  1004.,  a  uniform  bill  of  lading  was  adopted  in 


252 


INLAND  TRAFFIC 


the  United  States.  Application  was  made  to  the 
Board  to  approve  t)t'  this  l)ill  in  the  ease  of  shipment n 
i'rom  any  point  in  tlie  United  States  into  Canaihi  and 
in  the  transit  trade  thru  C'anachi.  In  makiuii  this 
appheation,  the  railways  set  out  that  it  was  desired 
to  settle  the  (piestion  of  the  lev  loci  contractus  on 
shipments  from  different  states  into  Canada,  the  law 
not  heing  the  same  in  these  different  states.  Then  - 
fore,  as  it  was  phrased,  the  recpiest  was  made  for  tlu 
Board's  protection  hy  way  of  approval  so  far  as  Ca- 
nadian transit  was  concerned.  The  approval  was 
granted  in  IIHO. 

Two  special  forms  to  he  noted  are  the  special  con- 
tract on  silver  and  other  valuahle  ores,  in  which  tlu 
railway  limits  its  liahility  to  $.)()()  per  net  ton,  and 
the  household  goods  "release"  in  which  a  lower  rate 
is  given  on  a  released  valuation  of  $5  for  any  y>uv 
piece  or  package. 

Both  in  English  and  Canadian  law.  it  has  been 
recognized  that  the  carrier  may,  hy  contract,  exempt 
itself  from  liahility  for  negligence:  such  exemption 
has,  however,  to  he  put  in  express  and  unamhiguon^ 
terms.  There  are  a  number  of  contracts  dealing  with 
liahility  in  respect  to  particular  comniodities  oi-  serv- 
ices. The  livestock  co!itract  is  at  present  heinu 
worked  over  by  a  special  committee  of  shij)pers  and 
railway  representatives.  Men  in  charge  of  property 
other  than  livestock  are  recpiired  to  sign  a  release 
from  claims  for  injury,  whether  causetl  by  negligeiu  ( 
or  not.     The  potato  contract  of  the  Vermont  Central 


mm 


1 


CONTKACT  OF  CAPRIAGE 


iioH 


contains  an  exemption  Iron:  ne«rlinence.  The  same 
provision  oeem.s  in  the  ^reneral  release  forms  of  the 
Michigan  Central  and  the  Xiaoara,  St.  Catharines, 
and  I'oronto  Hailways.  It  is  also  to  he  found  in  the 
contracts  of  the  Michi^r-m  Central  and  the  Toronto, 
Ilannlton  and  Buffalo  in  the  ease  of  animals  carried 
in  hag>ra^re  cars.  In  the  ease  of  cirt-us  contracts,  a 
nuniher  of  Canadian  railways  recite  that  they  act 
neither  as  common  nor  as  special  carriers,  hut  sim})ly 
as  hirers  of  ecjuipment  and  train  crews  for  the  circus 
ill  respect  of  the  transport  of  its  outfit,  and  that  the 
latter  assumes  all  risks,  inclu(lin«r  ne^lioence. 

11.  Due  (liligemr.—Vnkss  arranged  under  special 
contract,  the  railway  is  not  hound  to  transport  ^^ninh 
hy  a  particular  train  or  vessel,  or  in  time  for  a'' par- 
ticular market.  Its  ohlio-ation  is  to  use  'clue  dili- 
.iXcnce."  Due  diligence  in  law  means  everything  reas- 
onahle,  not  everything  possihie.  The  ipiestion  of 
what  is  reasonahle  time  for  delivery  is  one  of  fact 
for  the  jury,  and  it  has  heen  decided  that  no  deHnite 
rules  can  he  stated  as  to  what  will  and  what  will  not 
constitute  nnrcasonahle  delay,  as  this  nmst  depend  on 
the  circumstances  of  each  case. 


RKvrr.w 


Wliat  are  tlif  ooimiinn  law  nlilipitions  of  (arrirrs: 

Wliat   is  a   hill  of  ladin-j;? 

Tiivr  the  limitations  of  a   railway's   hahilitv. 

What   is   the   fxt.-nt   of   a    railway  s   liahilitv   as   a    war.hoi 


man  .■' 


ls«'- 


What   are  the   forms   of  a   hill    of   ladinii-      What    i^   the   dif- 
f'Tence  hetwern  a  straiyht  hill  and  an  order  hilP 
XV  c— 18 


I  IPi 


im 


'  -i'-.i . — »=^ 


CHAPTKK  XVI 


MoviN(;  THK  THAI  ric 

1.  Actual  car  movements.  -The  shipper  is  inter- 
t'stt'd  in  ohtaiiiiii^  a  prompt  supply  of  cars  with 
prompt  iiiovcmeiit  in  transit.  The  railway  is  inter- 
ested in  ohtainin^  the  greatest  possihle  effieieney, 
sinee  it  is  its  ears  whieh  are  its  money  eolleetors.  Hut 
wliile  it  mi^ht  appear  that  there  shouhl  he  no  dittieulty 
in  ohtainin^  an  ide.nl  eomhination  of  interests,  never- 
theless there  are  diffieulties  in  praetiee.  Expedited 
movements,  e.  ^.,  livestoek,  time  freights  and  various 
other  eireumstanees  and  eonditions  interfere  with  the 
hahujee  of  miitnal  satisfaetion. 

An  ordinary  frei<^ht  ear  while  in  motion  on  the  road 
may  he  reekoned  to  move  at  10  miles  per  hour.  How 
far  the  |)erformance  falls  short  of  the  possihle  move- 
ment may  he  gathered  from  the  following  summary 
settin*^  out  the  avera«(e  numher  of  miles  traveled  hy  a 
freight  ear  in  a  day: 


i<)i  I- 

JC.fl 


idifi 


i)»i; 
-•;.:{ 


I!)|S      1<»|<) 

.n.i     :i.: 


ifi.'d    lit.'i 


lit  J  J 

.H.I 


i<)j:j 


Putting  eertain  eom|)arisons  in  a  summary  way.  tin 
followinir  results  for  lt)2.'J  as  compared  with  lOli)  ar( 
availahle: 


/:-|li       ■■ 


MOVIM;  TIIK  traffic  2)5 

I'reiftht  trnin  inili';ipe  j»rr   frvifi\,\  cnjrini-  incn-ascd  liv lH,„.r<en» 

TonnaKc-   incri-.isc.l   l,x     • ,;  ,.,.„, 

!■  r«'i>ilit  train  iniltage  iru-reascil  l>y   I  >  iht  <«tit 

That  is  to  say.  tonnage  lias  Ik'o!!  iiuTi'asin|r  K'ss  rap- 
idly than  the  work  to  he  done  in  hanhng  this  ton- 
nage. 

In  Canada,  in  192.'J,  the  average  haul  of  a  ton  of 
freight  was  288  miles.  With  a  freight  ear  moving 
27  miles  per  <lay,  it  thus  took  on  the  average  over 
10]  days  to  make  this  journey.  iVssuming  that  .is 
soon  as  the  ear  ends  this  journey  it  ean  start  on  an- 
other, the  maximum  numher  of  trips  it  can  make  in  a 
year  would  he  ahout  thirty-four. 

2.  MnnifcHt  firif/ht  affains  hl</h  speeds. — At  the 
same  time  there  has  heen  an  increase  in  the  ciihical 
contents  space  of  the  car,  and  a  great  increase  in  max- 
imum tractive  efficiency.  For  example,  a  Grand 
Trunk  engine  huilt  in  187.3  had  a  tonnage  rating  of 
from  aOO  to  .5.50  tons,  while  an  engine  huilt  in  11)12  for 
the  same  system  had  a  rating  of  from  1,.)0()  to  2,.500 
tons.  Time  or  manifest  freight,  that  is  to  say,  higher 
grade  goods  moving  in  train  loads  where  time  is  im- 
portant and  there  is  a  movement  on  a  relatively  fixed 
schedule,  attains  high  speeds.  The  \Val)ash  moves 
out  of  Sarnia  tunnel  hehind  one  engine  2.000  tons  of 
such  freight,  which  goes  forward  at  2.5  uulcs  pei-  hour. 
It  is  evident  that,  in  general,  the  transportation  effi- 
ciency is  far  within  the  maximum. 

.3.  Dnnurraf/c. — Demurrage  is  a  charge  in  addition 
to  the  rate,  such  charge  heing  intended   to  compel 


JL 


25(5 


IXT.ANl)  TRAFFIC 


prompt  loadinj^  or  unloading  of  cars.  The  word  is 
maritime  in  its  origin;  as  early  as  the  twelfth  century 
it  was  used  to  express  the  payment  of  detention  of  a 
vessel  heyond  the  normal  time  retjuircd  for  loading  or 
unloadin«»".  In  railway  practice,  a  denuu'rage  charge 
is  n <)t  a  car  rental,  hut  a  penalty  charf»e. 

The  first  car  service  hureau  in  the  United  States 
was  orfTumzed  at  Omaha  in  Octohcr,  1H87.  This  was. 
iiovvever,  concerned  only  with  a  cooperative  or<»aniza- 
tion  to  deal  with  common  interests.  'I'he  principle  of 
such  a  charge  had  heen  recognized  as  early  as  187-. 
Ifi  Canada,  the  principle  of  such  a  charge  was  adopted 
hy  the  Canadian  Pacific  and  the  Grand  Trunk  iti 
1802:  it  was  suhscciucntlv  extended  to  other  rail wa vs. 

The  Canadian  Car  Service  Kules  (demurrage)  wen 
approved  hy  the  Board  in  1900.  Amended  "Cana- 
dian Demurrage"  rules  hecame  effective,  under  Order 
of  the  Board,  on  August  20th,  1917.  In  hoth,  then 
is.  in  general,  forty-eight  hours  free  time  allowed  foi 
loading  or  unloading  a  car.  There  are  certain  modifi- 
cations of  this  rule.  Lumher  and  hay  are  allowed, 
for  exj)()rt,  five  <hiys'  free  time  at  Montreas  and  tidt- 
water  ports.  In  Western  Canada,  under  the  term-, 
of  the  Cana(hi  Grain  Act.  twenty-four  hours'  frt* 
time  for  h)a(ling  is  allowed.  Under  the  190(5  Order, 
ill  the  unloading  of  coal,  coke  and  lime,  in  hidk,  and 
in  the  loading  and  iinlo."Jing  of  hoards,  deals,  and 
scantling  seventv-two  hours'  free  lime  are  allowed. 
This  exception  is  not  contained  in  the  1917  Order. 
In  hoth  Orders,  the  free  time  is  exclusive  of  Sundav 


MOVIVr,  THE    THAFI  IC 


and  le^al  lioliilavs.  In  both  forms,  when  turessarv 
to  clear  Customs,  twenty-four  hours  athhtioiial  free 
time  is  allowed  for  this  purpose. 

In  l)oth  sets  of  rules,  whe?j  loeal  weatlier  eondi- 
tions  render  loadin«>'  or  urdoadiny-  impraetieahle  dur- 
ing business  hours,  the  time  allowance  is  to  be  so 
ixtended  as  to  allow  the  full  free  time  of  suitable 
weather.  Hut  if  the  |)arties  neglect  to  a^ail  them- 
selves of  the  period  of  free  time,  no  additional  free 
time  is  allowed. 

Delays  due  to  conditions  over  which  the  consiunee 
has  no  control  frecpiently  cause  trouble.  To  cover 
this,  there  is  a  "bunching"  rule.  I  'ndcr  the  1  'Mm  rulr, 
it  is,  in  substance,  provided  that  wh(i<  thru  rail- 
way conditions  or  the  act  or  neglect  of  the  railway 
or  connecting  railway  or  emphnes  or  to  railway  acci- 
dents "cars  are  tendered  to  the  consignee  in  numbers 
i)eyond  his  ascertained  reasonable  ability  to  mload 
within  the  authorized  free  time."  he  is  to  be  allowd 
such  additional  free  time  as  will  allow  hini  with  due 
and  reasonable  diligence  to  unload  the  cars  so  in  ex- 
cess. Under  the  1017  rule,  the  provision  is  that 
where  cars  for  loading  "arc  bunched  and  placed 
for  iiiiiimding  in  excess  of  daily  orders"  and  in  the 
c.ts-  f,f  unloading  or  recotisigning  "are  dclivLCcd  by 
the  line  carrier  in  accumulated  numbers  in  excess  of 
daily  shir^iJiCirts,"  the  shipper  or  coTisignee.  as  the 
case  v.iuv  b( ,  is  t  >  liavt  the  same  free  time  as  he  would 
liave  had  if  ihc  instructions  or  daily  rate  of  shij)ment 
had  been  live  -  np  to. 


ilfl 


ilr 


258 


INLAND  TRAFFIC 


Kxcess  time  umler  the  100(»  inks  was  subjected  tn 
u  penalty  d."  {j^l.OO  per  ear  per  day.  Tuder  tlie  1021 
rules,  the  penalty  for  the  first  and  second  (hiys  is 
$1.00  a  (hiy:  for  the  third  $.3.00  to  $.>.00;  for  the 
fourth  $4.00  to  $.).00;  for  the  HI'th  and  each  sueeeed- 
nig  (hiy  $5.00. 

Kaeh  railway  has  its  own  ear-service  officials  and 
depjrtinent.  in  addition,  a  Car  Service  Hureau 
or^rani/.ed  in  100({,  deals  with  complaints  between 
railways  and  with  conjplaints  from  individuals  as  to 
the  amount  of  (|cniurra«ife  assessed. 

4.  Claims  presented.-  DuriUir  the  year  ended  De- 
cember 31',t,  1021,  the  Canadian  Denuirra^e  Hureau 
handled  1.7  millions  of  freight  cars.  This  was  eejuiv- 
alent  to  handling  all  freiglit  cars  in  Canada  nine  times 
during  the  year.  The  Canadian  Pacific  and  the 
(irand  Trunk  had  respectively  28..)  and  a7  per  cent 
of  the  cars  handled.  The  claims  for  refunds  pre- 
sented were  1781.  involving  $27.5,042;  .57.0  p'^i  cent 
of  this  amount  was  adjusted. 

.5.  Demurrage  and  ear  shortage. — The  importance 
of  the  demurrage  rules  is  especially  bound  up  with  the 
<luestion  of  car  shortage,  which  is  a  phenomenon  that 
uTiforturiately  often  presents  itself  in  the  fall  of  the 
year.  In  the  Canadian  West,  ^rain  has  to  be  rushed 
to  the  Lake  front  in  as  large  an  amount  as  pos- 
sible before  the  close  )f  navigation.  Consequently, 
large  stocks  of  cars  have  to  be  accumulated.  At  the 
same  time,  the  fall  is  a  busy  shipping  season  in  tin 
field  of  general  merchandise.     Again,  in  the  trade  b»- 


m 


^^ 


MoviNc;    rm;    ruAiiic 


•jyj 


tWL'vn  Canada  aiul  thf  riiittd  Statrs  tlu'iv  aw.  t\)r 
txainplo,  lar^e  iii<»vtiiK'iits  <»f  hay.  IT  this  hay  is 
i'onsi|rui(I  to  a  reaihly  ((Uj^istid  ttriiiiiial.  siuli  as 
Xt'w  York,  the  mnvenKiit  (»t'  additional  cars  into  the 
Xt'w  Voik  tcniiinals  may  he  st(»|)|)t'(l  for  a  lime.  This 
is  doiK'  hy  thi'  issiiaiur  of*  a  notice  known  as  an  cni- 
har^(».  The  embargo  remains  in  force  nntil  the  con- 
^nstion  is  rehcved.  In  the  meantime,  the  hay  cars 
remain  under  load  either  in  the  terminals  or  on  the 
road.  A  ear  may  he  tied  up  in  this  way  for  two  or 
three  months. 

While  it  is  the  intention  of  the  rules  that  a  car  shall 
he  placed,  loaded  or  unloaded  in  as  short  a  time  as 
possible,  with  the  free  time  as  a  maximum,  it  is  possi- 
ble that  the  full  free  time  may  be  taken  up.  The 
average  freight  haul  in  1J)2.'J  was  288  nules.  At  an 
assumed  running  speed  of  10  miles  per  hour  this  trip 
could  be  made  in  1  day,  4*  hrs.  This  leaves  80  per 
rent  of  the  time  taken  in  the  average  freight  ear  tri|) 
fo  be  accounted  for  by  free  or  free  an<l  excess  time 
under  the  denuirra^e  rules  ar  i  railway  detentions. 

f).  A  matter  of  con  trovers//. — There  are  mutual  re- 
criminations over  car  detentions.  In  the  period  July 
1  to  December  l.'j,  1012.  lines  west  of  l*ort  Arthur 
had  0.280  cars  hehl  in  excess  of  Hve  days  over  free 
time,  on  which  there  were  KXJ.O.'U  days'  <letcntion. 
A  detention  of  as  hi^h  as  1.52  days  was  noted  in  one 
rase.  The  total  number  of  days'  detention  was  e(jual 
to  10.»;0()  additional  freight  car  trips  which  miffht  have 
'ten  performcti  in  the  period  covered.     If  further, 


1 1; 


1^ 


f^mi 


MICROCOPY    RESOLUTION    TEST   CHART 

(ANSI  and  ISO  TEST  CHART  No.  2) 


1.0 


I.I 


1.25 


12.2 


13,2 


140 


1.4 


2.0 


1.8 


1.6 


^  yiPPLIED  IMAGE     Inc 

ST  1653    East    Mam    Street 

^S  Rochesle'-.    Ne*    York         1 4609        USA 

i^a  (716)  482  -  0300  -  Phone 

^=  (716)  288  -  5989  -Fax 


S60 


INLAND  TRAFFIC 


tlie  five  davs  over  free  time  were  taken  into  considera- 
tion,  the  total  number  of  days'  detention  would  Ik 
c([uivalent  to  l."),2()0  additional  car-trips;  this  was 
e(juivalent  to  an  addition  of  10  per  cent  to  tlie  car  sup- 
ply. On  the  other  hand,  sliippers  furnished  many  ex- 
amples of  delays  in  transit.  Between  Ilawkesbury 
and  Hull,  a  distance  of  88  miles,  1)  days  were  taken  in 
ti-ansit,  and  between  Ilawkesbury  and  Toronto,  a  dis- 
tance of  .*348  miles,  1.)  days.  The  average  time  of 
transit  for  (J.)  cars,  between  Alberta  points  and  tlu 
head  of  the  Jjakes.  was  .50  days.  Complaints  wert 
also  made  by  the  shippers  of  delays  in  placing  cars, 
as  well  as  of  delays  in  moving  cars  under  loads;  ex- 
amples of  two,  three  and  more  days'  delay  in  lifting  a 
car  after  it  was  loaded  were  given. 

In  the  figures  of  western  lines  already  referred  t 
analysis  points  to  delays  in  terminals  as  an  important 
factor.  The  figures  of  the  California  denmrrage  bu- 
reiHi  show  that  San  Francisco,  Oakland  and  Los 
Angeles,  with  24..)0  per  cent  of  the  cars  handled,  had 
.*}(). 2.3  per  cent  of  the  cars  held  over  time  and  incurred 
lii.'Iii  per  cent  of  the  demurrage  charges.  While  the 
lailways  contend  that  they  have  increased  their  ter- 
minal facilities  in  excess  of  the  unloading  facilities  of 
the  consignees,  the  admonition  of  the  Grand  Trunk 
to  its  yardmasters  and  yardmen  is  pertinent:  Expedite 
movement  "by  realizing  that  a  yard  is  a  place  to  get 
cars  out  of,  not  a  place  to  get  cars  into."  Delays 
in  transit  may,  in  the  case  of  a  single  track  road,  be 


() 


MOVING  THE  TRAFFIC 


261 


due  to  inadequate  side  traek  acconunodation.  If  the 
terminals  of  sueh  a  road  are  eongested  the  ears  MoeU 
iij)  haek  on  the  Hue. 

7.  Ili(/licr  dcmurnuji'  charges. — Trginu-  that  the 
[)resent  eharge  is  not  a  sutfieient  deterrent,  tiie  rail- 
\N.iys  point  to  the  faet  tliat  the  vahie  of  the  ear  to  the 
railway  has  iiiereased.  Wlien  the  doUar  rate  was  first 
>truek  in  the  United  States,  in  187*i,  the  normal  ear 
held  fifte(  n  tons  and  had  an  average  load  of  about  six 
tons.  Now  there  are  HO-ton  ears  with  an  i\\  eraiie  load 
of  twenty-two  tons.  They  point  out  that  in  Canada 
the  average  daily  earnings  of  a  freight  ear  are  $-2..52, 
and  that  the  demurrage  eharges  should  he  eommen- 
surate.  The  shippers  rejoin  that,  when  operating 
e\|)enses  are  deducted,  a  ear  nets  about  $!.(),>  a  day. 
Tlie  higher  demurrage  eharges  provided  for  in  1917 
were  intended  by  increased  penalty  to  force  (luicker 
car  handling  by  consignors  and  consignees. 

In  California,  as  a  result  of  the  co!igestion  of  the 
San  Francisco  and  Oakland  terminals  after  the  earth- 
(|iiake,  high  demurrage  rates  were  adopted.  These 
hecame  general,  and  so  between  July,  1009,  and  April, 
liUl,  there  was  a  rate  of  $(>  per  day  on  the  intra- 
state traffic,  while  on  interstate  traffic  the  rate  was 
•^1.  In  March,  1911,  98.12  per  cerit  of  the  cars  in 
state  traffic  were  released  in  the  free  time,  wliile  on 
interstate  traffic  the  pereeni.tge  was  94.79  per  cent. 
The  excess  over  free  time  on  the  state  rate  was  1  day, 
while  on  the  interstate  traffic  it  was  2.15  days.     In 


?:fi 


INLAND  TKAFirlL 


I  m 


May,  1911,  u  -$3  rate  went  into  force  on  tlie  stati 
traffic,  Tile  same  rate  was  adopted  on  the  interstate 
traffic  in  February,  l<)i;j. 

In  Annust,  l<)i;j,  the  percentage  released  in  i'va 
time  on  state  tratHc  was  t)8.12  i)er  cent,  while  oi, 
interstate  traffic  it  was  J)T.2()  per  cent.  A  consider- 
able j)art  of  the  difference  is  due  to  the  t'aci  that 
on  the  state  movement  the  originating-  road  has  bettei 
control  of  the  movement.  Further,  in  California.  ;i 
Kreat  j)art  of  the  movement  is  concerned*  with  one- 
line  hauls  on  which  the  orioinating  carrier  has  con- 
trol thruofut.  On  the  interstate  movement  there  an- 
delays  in  connection  with  "order"  shi})ments,  deliverv 
of  coal  direct  from  track  to  the  consumer  and  con- 
tractors' supplies  shipped  in  advance  of  actual  de- 
mand therefor. 

The  Pacific  Car  Demurrage  Bureau,  in  its  brief  be- 
fore the  Interstate  Conunerce  Cf)mmissio!i  in  1<)1'J. 
(|Uoted  the  mana.i>er  of  the  Weed  Lumber  Conij)any 
of  San  Francisco: 


Siiu'o  till"  <le'niurni<re  ra\v  of  .$()  per  car  wont  Mito  ett'crt  n 
1009,  and  later  reduced  to  ,$;3,  reasonable  terms  of  loadiiin 
and  discharging  being  allowed,  we  have  had  a  fairlv  abun- 
dant supply  of  cars,  even  in  the  most  restricted  season  of 
the  year  when  the  crops  were  moving.  To  my  mind  tlu 
dennn-rago  charge  of  $(>  per  day,  after  reasonable  time  al- 
lowed for  loading  or  discharging,  would  be  more  advan- 
tageous to  the  shipper  than  a  lower  rate,  because  of  the  facr 
that  it  would  keep  ecjuijnnent  from  being  used  for  storage 
purposes  and  keep  it  free  for  transportation  })urposc-. 

8.  S pedal  (h'la//.s  occur  in  unhmdiug. — A  special 


MOMXC;  THE  TRAFFIC 


2r).'3 


report  for  the  four  inontlis  eudin/^-  May  .'Jl,  V.ni\  shows 
that  under  the  deninrra^e  rate  of  .s;j  per  (hiy,  1.74  jK-r 
cent  of  the  ears  in  Cahfortiia  were  held  over  free  time. 
The  espeeial  dehiy  was  in  unloading-.  More  tijan  lialf 
the  total  numher  of  ears  were  held  for  loading-;  |,ut 
less  than  one  per  eent  of  these  were  held  overtime; 
whereas  2.82  per  eent  of  the  ears  held  for  uidoadin^ 
were  held  overtime.  In  California,  .'J-i  per  eent  of  the 
cars  held  overtime  eontained  hay,  potatoes,  ^rrain. 
fruits  and  vegetahles,  i.e.,  eommodities  held  for  market 
conditions.  Sand,  rock,  eement,  ete.,  made  up  7  per 
cent  more,  while  eoal  represented  :j  per  eent  and  auto- 
niohiles  4  per  cent. 

1).  Average  demurrar/e.— While  the  railways  have 
made  suggestions,  as  indicated,  for  the  imi)r()vement 
<»f  the  demurrage  situation,  the  shippers  have  from 
tune  to  time  made  recommendations  that  either  aver- 
age demurrage  or  reciprocal  dennu-rage  should  he 
adopted. 

Tiider  the  national  demurrage  rules  of  the  Fnited 
States  it  is  provided  that  when  the  shipper  so  elects, 
and  gives  assurance  of  promj)t  payment  to  the  rail- 
\v,i\',  the  demurrage  charges  may  he  settled  on  a 
'  .chly  halance  of  dehits  and  credits  worked  out  as 
follows:  a  credit  of  one  day  at  a  rate  of  $1  |)er  day 
^  given  for  each  car  released  within  the  first  twenty- 
tour  hours  of  free  time:  a  dehit  of  one  day  is  charged 
tor  each  car  held  for  each  day  or  portion  thereof  that 
tiie  car  is  held  })eyond  free  time.  In  no  case  is  a  credit 
of  more  than  one  day  allowed  on  anv  one  car,  nor  mav 


«6^ 


INLAND  TRAFFIC" 


more  tlian  rive  days'  credit  l)e  allowed  in  cancelation 
of  debits  accruing  on  any  one  car.  If*  there  is  an  ex- 
cess of  credits,  no  payment  is  made  therefor.  Tlu 
credits  of  one  month  do  not  apply  on  a  subse(jucnt 
month.  When  a  shipper  elects  the  average  system 
he  has  not  the  advantage  of  the  allowances  in  respect 
to  weather  conditions  and  "hunching"  which  are  avail- 
able to  those  using  the  straight  demurrage  rules. 

Those  who  argue  for  an  average  arrangement  treat 
the  free  time  allowance  per  car  as  a  matter  of  right  to 
which  each  shipper  is  entitled.  A  representative  ol 
the  Canadian  brancli  of  the  International  Ilarvestci 
Company  testified  that  the  company's  yard  tracks 
could  be  worked  more  efficiently  under  the  averai>x 
system.  Instead  of  the  extra  switching  necessary  in 
order  to  get  out  a  car  in  the  order  of  date  and  tluis 
save  demurrage  the  car  could  be  used  regardless  of 
date  of  arrival. 

In  a  summary  way  the  arguments  advanced  for 
average  demurrage  are:  it  means  the  more  rapid  nhu  - 
ing  of  cars  for  loading  or  unloading,  thus  effecting  ,i 
saving  on  tlie  cost  of  handling  by  the  railways:  cni^ 
will  be  emptied  faster  and  will  be  })laced  at  the  dis- 
posal of  the  carriers  earlier,  and  not  only  tlie  reccivt ; 
who  takes  an  interest  in  releasing  his  cars,  but  evci  \ 
shipper,  will  be  benefited:  and  it  will  remove  the  fric- 
tion which  frequently  arises  between  the  carriers  and 
the  receivers  in  respect  of  weather  interference  aixl 
bunching  in  transit.  The  railways  contend  that  tlic 
maximum  free  time  is  intended  simply  to  give  a  maxi- 


M()viN(;  Tin:  traffic 


iim 


Jiiiini  reasonable  t  me  to  eovei*  not  o;ily  tijose  who  liave 
<'()0(l  unloading  laeilities,  but  also  those  who  have 
|)()orer  faeilities,  and  that  the  shii)|)er  should  use  only 
M)  niueh  time  as  is  neeessary.  in  dealino-  with  the 
lelation  ol'  detention  to  ear  shoriaiies  the  (ieoruia 
Uailroad  Commission  said  in  11)12: 


Whiii'  tcrtiiiii  fivi'  time  is  ullowtd  lor  l()u<liii<r  jiiul  uiiload- 
iiiy-  cars,  this  does  not  necessdrilv  iiieaii  that  it  oiiirht  to  l)e 
(Kdsimied  in  every  iiistmu-e  and  regardless  of  otlier  coiisid- 
nations  or  circunistances.  ("ars  should  \h-  loaded  and  un- 
loaded as  promptly  as  {mssihle  after  heinj^  jdaeed.  It  is 
not  fair  to  the  carriers  or  otlier  shippers  to  liold  tlieni  for 
4S  hours,  just  because  one  has  that  much  free  time  by  law, 
when  they  could  just  us  well  he  handled  in  6  or  12  hours. 

In  a  paper  presented  before  the  National  Assoeia- 
tion  of  Railway  Conunissioners,  at  Washinoton,  on 
Oetober  30,  1913,  Mr.  James  ().  Klapp.  the  manager 
of  the  Wisconsin  Demurraf»e  Bureau,  said: 

As  a  concrete  example  of  the  workin^r  of  this  rule,  we  call 
vour  attention  to  the  comparative  results  of  two  lar^e  firms 
ill  the  City  of  Milwaukee,  who  ai'e  working  under  the  aver- 
aye  airreement. 

.^  vcriipe  F)«l!iy 
Diiy-  J'crCar 

Dclivc-I  Per  Di.v 


I'lider  straight  denuirra^e 
March  and  April,  1910.  . 
I  ruler  averajre  agreement 
March  and  April,  1912, 


\iiiii!icr 

29()2 

n79() 


2.i;59 


.).) 


o: 


Delay  under  the  averam'  aifreiiiieiit  e\cei('    del; 


0.79 

l.K) 

IV  under 


th 


^traiifht  denujrrage  rules  0.H7  days  per  car       r  day — actual 
io^s  in  efficiency  J2.54!}  car  days  for  tlie  two  iii(»iiiii>. 

10.  Reciprocal   (Jcmiirntfjc.   -I/nder   tlr-    Uailwav 


m  ! 


5^66 


INLAND  TRAFFIC' 


L:i 


IK 


Act  the  lioani  is  specitically  ^iveii  power  to  deal  witii 
reciprocal  deinurra^e.  Knder  reci|)rocal  (leiniirra^( 
the  railways  are  penalized  in  the  same  way  as  the  ship- 
pers. The  penalty  may  he  for  delay  in  supplyin*^  :i 
ear  or  I'or  delay  of  the  car  in  transit,  or  hoth.  Ajipli- 
cations  in  this  connection,  take  on  two  forms.  One 
demands  that  the  railway  shouhl  he  re(irired,  uiidn 
penalty,  to  place  cars  for  loading  within  forty-eiyhl 
hours  after  they  are  ordered;  to  lift  the  cars  within 
twenty-four  hours  after  notification  of  loadin*^-.  and 
to  place  cars  for  delivery  at  destination  within  forty- 
ei^ht  hours  after  arrival.  The  second  application 
re(iuires  that,  in  addition  to  these  conditions,  the  rail- 
way should  also  he  penalized  if  it  does  not  transport 
each  loaded  car  a  fixed  distance,  say  one  hundred  mil(.> 
per  day,  twenty-four  hours  additional  bein^'  allowt<l 
to  complete  transfei'  from  one  line  to  another,  wlicii 
necessary. 

The  argument  for  reciprocal  demurrage  from  tin 
standpoint  of  its  analogy  to  the  ordinary  dennn'ra^uv 
charge  has  been  very  well  put  by  Mr.  J.  E.  Walsli. 
Traffic  ^lanager  of  the  Canadian  Manufacturers'  As- 
sociation: 

If  it  is  fair  (and  \vc  say  tliat  under  ordinary  circum- 
stances it  is  fair)  and  in  the  public  interest  that  a  chari't 
shouUJ  be  made  when  freif^ht  cars  are  detained  in  loadiii:,^ 
and  unloading  in  order  that  they  may  be  kept  avaihible  t'nr 
service,  it  is  reasonable  to  expect  that  the  railways  should 
be  subject  to  a  similar  penalty  when  they  delay  cars,  entai! 
ing  serious  loss  to  the  })ublic. 


MOVING  Tin:  TRAFFIC 


PJu 


The  shippers  ask  I'or  ixripiocal  (ItimirraMe,  net  from 
.1  desire  to  eolleet  the  penalty,  hut  to  insure  ear  supply. 
The  advantages  elainied  lor  it  are  threelold:  that  it 
will  expedite  supplying-  ears,  that  it  uill  hasten  Uiove- 
ment  in  transit,  and  that  it  will  insure  <4reater  prompt- 
ness in  delivery  after  arrival. 

The  railways  say  in  suhstanee:  it  is  not  deniurra^'e 
;iii(l  it  is  not  reeiproeal.  They  hold  that  delays  may 
he  attiihutahle  to  laek  of  eare  in  ordering-  cars.  FoV 
rxample.  at  a  ^rain-shippinn-  p„int  forty-six  appli- 
cants n.ay  hook  orders  for  ears  to  he  plaeed  on  one  day 
at  a  orain  elevator.  At  a  eountry  elevator  it  is  a  i.-o(m1 
•lay's  work  to  load  fom-  ears.  Therefore,  pen-dties 
would  aeerue,  when,  if  orders  had  heen  spread  out,  no 
sueh  forfeitures  would  he  invoked.  It  is  eontended 
that  in  times  of  espeeially  aetive  ear  movement  it 
\v()'dd  he  uin-easonahle  to  re(|uire.  undn-  pr.iaity,  a 
sm'dIv  of  cars  in  forty-ei^dit  hours.  The  delays' are 
'  -'d.  in  ^rroat  part,  to  the  insutheient  warehous- 
:  lities  of  shi|)pers  who  find  it  eheaper  to  hold 

U-  .....  in  ears  at  a  penalty  of  S|  per  day  than  to  sup- 
ply warehouses. 

The  railways  ur^e  that  while  allowance  is  proposed 
for  the  time  taken  in  transferriuir  from  one  line  to 
another,  efpially  ^rrcat  allowance,  if  not  greater, 
should  he  made  for  passin^r  thru  terminals  where  the 
J>n'akin<r  up  of  traifis  and  reclassify ino-  „r  cars  neccs- 
■sitates  delays.  It  is  claimed  that  tiieic  is  no  reciproc- 
ity as  hetween  a  penalty  cliaroe  on  a  ear  which  the  rail- 


|i  : 


11, 


if  > 


268  INLAND  TRAFFIC 

way  owns  and  a  tine  on  a  car  whifli  the  shipper  hires. 
It  is  fnrther  contended  that  reciprocal  deinnrra^ic 
wt)nid.  hy  colhisive  arrangements,  open  np  the  wn\ 
for  rehatin^",  since  it  vvonid  l)e  p()ssil)Ie  to  allow  ,i 
favored  shipper  to  have  cars  even  tho  it  were  known 
that  the  terms  on  which  they  were  ordered  nnder  tlie 
reciprocal  demurrage  could  not  he  adhered  to.  In 
respect  to  mileage  re(piirements  the  railways  <|Uott(l 
the  following  average  daily  movements  during  tlu 
grain  shipping  season  at  the  end  of  1911: 

.S.pt.  Oct.  Nov.  n.r 

Great  Nortlurn    2T.T  31  S+.S  ilOM 

Nort'iK'ni   Pjiciftc    24.4  2~.2  24.1  20.1 

Grand  Trunk  racihV 25.4  2;>.6  2.5..->  2().!) 

Canadian  PaciHf  (\V.  Lines).    .'iJj.J)T  3.>.51  ii.iMH  2().0i 

and  they  contend  tliat  the  recpiirement  of  a  detiiud 
mileage  per  {lay,  irres])ective  of  climatic  and  oth(  r 
conditions  over  which  they  have  no  control,  nld  le 
unfair  and  nnworkahle. 

IL  liaihcaf/  intmrlations  and  per  diem  eharge.— 
The  large  develo])ment  of  thru  })usiness  leads  to  cni> 
nnder  load  going  to  foreign  lines.  The  ..American 
Kailway  Association  has  a  code  of  Car  Service  Riilt  n 
and  per  diem  charges.  The  leading  Canadian  road^ 
are  memhers  of  this  association.  The  essential  rules 
covering  the  honieward  movement  of  foreign  cars.  i.  c. 
cars  of  another  line,  are  that  foreign  cars  nuist  lie 
proni])tly  returned  to  their  owners  loaded  (via  any 
route)  so  that  the  home  road  will  participate  in  the 
freiffht  rate:  or  loaded  to  the  road  from  which  oriui- 


MOVING  THi:  TH  \FFI( 


o 


ifJiJ 


iially  received,  if  such  loadiiio-  is  in  tlie  direetioii  of 
the  home  road,  i)ut  not  otherwise;  or  loaded  to  an 
intermediate  road  in  the  (hreetion  of  the  hoin«-  roa<': 
or  loaded  in  local  ?!  vice  in  the  direction  of  an\  jnne- 
tion  j)oint  with  the  ijome  road.  There  is  a  per  diem 
cliar^e  in  the  case  of  foreign  cars.  This  charge,  which 
has  varied  from  time  to  time,  was.  hefore  Decemher. 
l!n(),  4.5  cents.  It  was  then  raised  t(»  7.>  cent>  and 
|)rovision  was  made  that  it  mi^ht,  for  short  |)eriods. 
he  raised  to  $1.-J.>.  It  is  now  one  dollar.  This  char<^e 
is  not  analogous  to  the  demurrage  charge,  for,  in  addi- 
tion to  the  per  diem,  the  home  road  participates  in  the 
rate  when  the  car  has  moved  off  its  own  lines  under  a 
thru  rate  or  moves  on  its  own  lines  under  a  thru  rate. 

The  hox  car  has  been  called  a  'iegal  tender"  car 
since  it  is  a  car  of  general  and  interchangeable  service 
nil  any  line.  It  would  s*'em  justifiable,  with  a  view  to 
preventing  car  shortage,  to  e<|ualize  car  e<piipment 
thru  a  car  pool.  At  present,  the  road  which  is  short 
of  equipmCi  nay  steal  foreign  e(piipment  found  on 
its  lines,  since  it  is  cheaper  to  pay  per  diem  than  own 
cars. 

The  eid'orcement  of  the  rules  as  to  prompt  return 
of  cars  is  in  the  hands  of  a  commission  of  the  Ameri- 
can Railway  A  sociation.  The  rules  provide  that  a 
iioine  car  (a  car  on  the  road  to  which  it  hel:)ngs)  shall 
not  go  beyond  the  lihiits  of  its  lines  when  the  use  of 
oilier  Cv'«rs  is  practicable.  Foreign  cars  (cars  of  other 
lines)  on  a  direct  connection  of  the  home  road  must 
hv  forwarded,  loaded  or  emi)ty,  except  in  certain 
specified  cases.     Foreign  cars  on  other  than  direct 

XV    c— 19 


270 


INLAND  THAI  I'R- 


m 


rji 

I  4 

Pi 


(Mumtrtioiis  must  also  Ik*  forwarded,  hiadcd  or  cnfpty. 
If  the  car  is  returned  empty  it  may  he  sent  o',  jr  a 
short  route  at  a  reei|)rocaI  rate  (»!'  .'>  eeiits  per  milt. 
phis  hrid^e  and  terminal  ehar^i  s.  with  a  minimum  ol 
100  miles  for  eaeh  road  handling  the  ear.  the  roa<I  re- 
(|uestiti^  the  service  to  pay  the  cluirges. 

The  Canadian  railways  have  two  general  associa- 
tions- the  Canadian  Freight  dissociation  and  the  Ca- 
nadian Passenger  Association.  These  deal  with  mat- 
ters of  general  concern;  for  exam|)lc,  in  the  case  ot 
the  l*assen««er  iVssociation,  excursion  rates  and  ha<;- 
^a^e  rules;  in  the  case  of  the  Freight  Association, 
classitication,  «»eneral  sv,itchin«>-  tariti's,  and  tariff's  ot 
general  scope. 

12.  I)iti'r.sicit('liin</.—'[\i  reach  a  destination  on  a 
two-line  movement  a  short  haul  in  the  terminals,  at 
destination,  of  the  second  carrier  may  he  necessary. 
This  Mivolves  interswitchin^-.  An  Order  of  the  Hoard 
issued  in  1008  provided  a  <«e!  ral  tariff'  for  intei- 
sv,itchin^  within  a  four-mile  distatice.  The  line  car- 
rier was  permitted  to  absorb  the  toll  for  the  intci 
switchi!J<i-  of  competitive  traffic. 

A  toll  of  '>\i  cents  per  ton  with  a  minimum  of  $.'J  and 
a  maximum  of  ^'r  m  ear  was  provided.  Where,  sul- 
scijuent  to  shipment,  a  reconsi^nment  .scivicc,  invoU - 
in^'  the  use  of  the  terminal  of  the  second  carrier  w;i>> 
asked  for,  the  full  charge  fell  upon  the  consignor  (i 
consignee.  When  the  shipment,  as  billed,  involve  1 1 
the  use  of  the  terminals  of  the  second  carrier,  the  liiK 
carrier,  as  enjoying  the  benefit  of  the  line  haul,  and 


.M()VI\(J  TIIK  TKAFrir 


^71 


so  esfapiu^'  the   ttrmiiial  cliar|ri..s,   u 
ahsorl)  oiu-lialf  of  the  toll. 

Hy  a  (KiR'ial  Oi-lcr  itri'i'livi-  .1 
provision  is  iiiadf  not  ..iily  for  taiifl*  ihaiors  hiit  al 


lor 


tlu 


as   rciniircii    t»i 


niiiarv    1st.   HUM, 


so 


service  hein^-  eoniprsory.  On  sliipmt  iits 
t<»  pi  ivate  sidings,  the  ^^eiieral  rate  remains  nnehaiiue,|. 
The  niaxinmni  is  removed.  While  the  minimmrper 
car  is  unchanged  on  t'rei^iit  in  classes  seven  to  ten,  it  " . 
fixed  at  $.5  per  ear  in  the  higher  classes.  { 'nder  tlu 
I'ormer  Order,  th  line  carrier  was  not  re(|mre«l  to  re- 
duce its  revenue  l)elow  }f?K  per  car:  this  figure  is  nou 
tixed  at  ^\2. 

The  present  Order  ap|)lies  lo  team  tracks  as  well. 
These  were  not  included  in  the  former  Order.  On 
the  ground  of  puhlic  convenience,  team  tracks  are 
opened  to  interswitchin^r.  Thv  rate,  however,  is 
(louhle  that  set  out  ahove  and  there  is  <  minii  um  of 
'S<)  per  car.  The  line  carrier  has  to  a  )rl.  orjc-half 
the  rate. 

While  the  interswitch  movem*  t.t  rc(juires  the  ad- 
ditional service  of  an  inw  rmediate  carrier,  there  is 
authorized  for  this  a  charge  of  $;j  per  car  up  to  three 
miles  and  $3.50  up  to  four  miles. 

13.  Industrial  sidinf/s-. — A  consio-nor  or  "onsio-nee 
handling  carload  lots  mav  ship  or  receive  freight  on 
the  railway  team  tracks  or  lie  may  handle  his  husiness 
<;ii  a  siding  or  industrial  track  of  his  own.  Where 
raw  material  is  heing-  hrouifht  in  fnr  manufacturinii",  it 
is  an  advantai^e  to  uidoad  it  at  the  plant  w  ith  a  single 
break  bulk  movement.     Again,  as  at  the  plant  of  the 


^72 


INLAND  TRAFFIC 


International  Harvester  Company  in  Hamilton, 
when  shipments  of  agricultural  implements  are  !)ein^ 
made  to  the  Xortlivvest,  it  is  an  advantage  to  havt 
the  loachng  to  the  cars  done  at  tlie  plant,  for  this 
method  economizes  both  time  and  money. 

'J'o  the  shipper  or  the  consignee  engaged  in  a  busi- 
ness of  some  volume,  the  industrial  siding  has  become 
ahnost  an  essential. 

Under  the  Railway  Act,  a  railway  may  be  autho- 
rized  by  the  Board  to  build  such  branch  lines  not  ex- 
ceeding six  miles  in  length.  When  an  individual  or 
an  industry  desires  to  obtain  an  industrial  siding,  ap- 
plication is  made  to  tlie  railway,  and  a  statement  is 
made  as  to  what  traffic  and  how  much  of  it  will  prob- 
ably be  handled.  At  the  time  of  application  to  the 
Board,  the  municipality  has  to  be  notified  if  any  street 
crossing  is  involved. 

Each  railway  has  a  standard  form  of  siding  agree- 
ment which  the  ap))Hcant  lias  to  sign.  The  work  of 
construction  is  performed,  and  all  material,  except 
rails,  fastenings,  spikes,  etc.,  is  supplied  by  the  api)li- 
cant,  unless  he  desires  the  railway  to  do  it  at  his 
expense.  The  aj)phcant  has  also  to  secure  the  right 
of  way. 

For  the  movable  material,  i.e.,  rails,  etc.,  so  fur- 
nished, tlie  applicant  pays  a  specified  yearly  rcn'. 
Kates  being  as  good  and  service  l)cing  as  satisfactorx 
as  on  the  other  lines,  the  ap})licant  is  to  ship  over  tlie 
lines  of  the  railway  with  which  agreement  is  made. 
The  railway  is  to  have  the  use  of  the  siding  so  far  ;is 


y^  i'  ^.«S«»«ni>k'iL   ite'  :«n£3IM^V|Ml!leit.'N~  --rv*' 


i^S:  ilseSaf^' 


tV 


MOVING  THE  TRAFFIC 


273 


not  needed  by  the  applicant ;  and  may  also  permit  the 
use  of  it  by  others  upon  proper  compensation  to  the 
applicant;  any  dispute  about  compensation,  in  de- 
fault of  payment,  is  to  be  settled  by  the  IJoard. 

Provision  is  made  for  terminating  the  agreenjciit  in 
tlie  case  of  default  in  payment  of  rent.  Either  party 
may  also  terminate  the  agreement  on  two  months' 
notice,  provided  the  permission  of  the  Board  has  i)ecn 
obtained. 

When  the  railway  and  the  applicant  cannot  agree 
regarding  a  siding  to  an  industry,  established  or  to 
l)e  established,  the  Board  may  order  tlie  construction 
at  the  expense  of  the  applicant,  with  provision  for  re- 
fund of  such  cost  out  of  the  freight  rates  collected. 

14.  The  work  of  the  claims  de part rncjit. —Claims 
may  arise  from  train  collisions  and  derailments,  break- 
age, ])ilferage,  leakage,  soakage,  weather  conditions, 
non-delivery  or  delayed  delivery,  overcb.arges  due 
to  erroneous  rate  quotations,  misclassifications.  errors 
in  way-billing,  weighing.  There  arc  also  claims  aris- 
ing from  accidents  to  passengers  and  claims  for  cattle 
killed  on  the  tracks.  These  are  simply  mentioned 
here.  The  Canadian  Pacific  deals  with  about  .^.j.OOO 
claims  a  year,  the  Grand  Trunk  with  about  .>8.()()0. 

There  is  probably  no  department  of  the  railway 
service  Avbich  has  a  greater  opportunity  to  create  fric- 
tion, or  a  l)ctter  op])ortunity  thru  the  exercise  of 
iact  to  prevent  friction.  Sliippers  constantly  com- 
plain that  there  are  undue  and  unreasonable  delays  in 
connection  with  the  settlement  of  claims.     The  rail- 


^  m 


!■ 


in 


Ji74 


INLAND  TRAFFIC 


ways  respond  that  while  they  use  every  endeavor  to 
settle  claims,  there  are  of  necessity  delays  in  settle- 
ment. While  many  claims  are  made  in  good  faith, 
there  are  others  that  are  fraudulent ;  and  so  all  must 
be  tested. 

In  case  of  claims  arising  in  connection  with  move- 
ments local  to  the  line,  the  matter  should  be  promptly 
sifted  and  settled.  But  when  two  or  more  lines  are 
iin  olved  in  the  haul  there  is  a  reason  why  greater  de- 
Liys  may  take  place.  It  has  been  contended  by  ship- 
pers that  interest  should  be  allowed  on  claims  after  ii 
certain  date.  It  is  further  maintained  that  the  ex- 
pense bill  should  give  more  detail  as  to  advance 
charges  of  other  lines  and  the  additional  charges,  if 
any.  While  it  is  the  regulation  of  the  railways  that 
as  full  information  as  possible  should  be  given  on  the 
expense  bill,  in  various  instances  the  absence  of  it  has 
made  it  difficult  for  the  shipper  to  check  the  items. 
If  claims  cannot  be  satisfactorilv  settled  thev  have  to 
be  dealt  with  in  the  courts. 

In  a  hearing  before  the  Board  an  exhibit  was  sub- 
mitted by  the  Canadian  Northern  for  its  lines  west  of 
Port  Arthur,  setting  out  the  disposition  of  claims  filed 
on  account  of  error  in  rates,  weight,  classification,  or 
accounting.  For  one  year,  the  following  details  were 
presented : 

Claims   received,  local 1962 

Claims   received,  foreign 142f'3 


3385 


■?«'■■  ]g^v 


MOVING  THE  TRAFFIC  075 

Adjustment  made  as  follows: 

Local — 

16     '/(  adjusted  in  loss  than     7  davs 

21.87r  adjusted  in  less  tlian  14  davs 

9.ii'  I  i'.djusted  in  less  than  ^1  daVs 

11. 1',;  adjusted  in  less  than  -'JO  days 

41. .S',  ad  justed  bevond  J3()  (lavs 

l!i.,'J'r  took  over  ti  months  to  ad.just. 
Mean  average — HH  days 

Foreign — (refers  to  claims  on  joint  business): 
9M[r   adjusted  in  less  than     7  days 
lO.o'f   adjusted  in  less  than  14  days 
5.7 '/r  adjusted  in  less  than  21  days 
H.V/r  adjusted  in  less  than  JJO  days 
6.61%  adjusted  beyond  30  days 
iM.iy/c  took  over  3  months  to  adjust. 
^Nlean   average — 37   days 

REVIEW 

Explain  the  meaning  of  the  word  demiirrafje.  as  it  is  used  in 
this  Text.      What  are  the  rules  in  regard  to  demurrage? 

What  is  the  connection  hetwecn  demurrage  and  car  shortage? 

What  are  the  arguments  advanced  in  favor  of  Ingiit  r  demur- 
rage charges? 

Give  tlie  arguments  in  support  of  an  average  demurrage    -ate. 

Discuss   tlie  nuestion   of  reciprocal  demurraire. 

Summarize  the  subject  of  interswitching;  of  industrial  sidings. 


.e. 


11 


CHAPTER  XVir 

EXPRESS  SEKVIC  E 

1 .  h\r press  service  and  its  scope, — Express  service  ' 
is  ail  expedited  freio-ht  service  carried  on  passen«rer 
trains  under  the  personal  care  of  an  express  niessen- 
^e..     In  addition,  there  is,  in  the  case  of  towns  and 
cities,  either  a  dehvery  or  a  pick-up  and  dehvery  ser\  - 
ice.     \Vhile  it  is  a  frei^dit  service,  the  companies  per- 
fonniii^r  th^  service  do  not  own  the  means  of  trans- 
portation, as  in  the  case  of  ordinary  freiirht  carriers. 
They  enter  into  contractual  rehitions  with  the  railways 
for  the  purchase  of  space  for  the  carria^^e  of  ^ootis. 
While  the  railway  has  a  larcfe  investment  of  capital  in 
ti  fixed  form  in  roadhed  and  cars,  the  express  com- 
pany's investment  is  concerned  for  the  most  part  with 
office  s])ace,  horses,  wairons,  or  motor  vehicles  for  per- 
formino-  piek-up  and  delivery  service. 

The  express  service  covers  not  only  the  carriacre  of 
hio-h-^rrade  parcel  frei«rht,  liut  also  that  of  articles  of 
f (K)d  and  drink.  Xot  only  are  packaf?es  carried :  ])ro- 
vision  is  also  made  for  the  movement  of  horses  in  car- 
loads as  well  as  for  refri^sferator  car  service  in  the 
case  of  fish  and  fruit.  Provision  is  made  for  the  ship- 
ment of  currency,  bullion,  ^old  and  silver  coin,  i)re- 

•  There  were  C 


filings  of  express  tariflF 


s  with  the  Board  in   19?f?. 


276 


EXPHKSS  SKRVKi: 


277 


cknis  stones,  valiuible  papers  and  seem-ities.  A 
l)ankin^-  bnsiness  is  done  tin-u  the  issuanee  of  nionev 
orders.  The  returns  from  C\  ().  1).  shipments  are 
also  colleeted  and  returned  to  the  eonsi^n,,,,-. 

Tlie  n)oveinent  is  not  limited  to  one  eountry  alone, 
foreioi,  shipments  also  beino-  liandled.  In  addition, 
viirions  other  serviees  are  rendered.  The  wide  seope 
of  these  is  set  out  in  the  following-  extraet  from  a 
speeial  report  made  l>y  the  Interstate  Commeree  Com- 
mission in  1000: 


(inuuunhtws  of  all  kinds  arc  bought  and  tnins,,„rti.,l  on 
orders  and  arc  likewise  transported  and  sold  on  orders       To 
care  for  and  extend  this  branch  of  the  business  properly,  the 
various   companies  maintain   order  and   eoniinissjon  dJpart- 
nients.   .   .   .   E"  press    business     is    carried    on    thru    order 
p.nd  comnussion  departments  in  four  different  wavs,  vi/.,  (1) 
a  patron  may  order  any  commodity,  subject  to  express  ship- 
ment, ^vhich  ^vill  be  purchased  by  the  company's  agent  and 
transported  to  him  for  express  charges;  (Ji)  a  patron  may 
(lehyer  any  commodity,  subject  to  express  shipment,  to  ai. 
agent  of  the  comi)any,  to  be  transported  to  a  certain  buyer 
and  the  agreed  sale  price  to  be  collected,  ami  transmitted' to 
the  shipper  for  express  and  money  order  charges;  (.'})  a  pa- 
tron may  deliver  any  connnodity,  subject   to  exfi>vss  ship- 
iiunt,  to  an  agent  of  a  company  who  will  undertake  to  sell  it 
tiiru  other  express  agents  to  the  best  advantage  on  shippers' 
account  and  transmit  the  proceeds   for  express  and  money 
order  charges:  (4)  a  patron  may  request  an  express  agerit 
to   perform   any   reasonable   commission,   such   as   collecting 
^<.lls,  filing  papers  for  record,  redeeming  pledges,  etc.,  which 
"ill  be  undertaken  by  the  company  for  agreed  charges. 

The  report  continues  by  stating  that  the  express 
agent  will  enter  and  clear  articles  at  custom  houses, 


i  VI , 


11  r 


278 


INLAND  TRAFFIC 


transport  goods  in  bond,  exchange  foreign  money, 
redeem  pawned  articles,  pay  gas  bills,  and  "in  short. 
will  attend  to  any  legitimate  business  trans  ction  as 
the  customer's  agent." 

2.  Early  history  of  c.rprcss  cow  panics. — In  the 
early  days  of  railway  travel  in  the  I'niled  States,  espe- 
cially between  New  York  and  Boston,  there  grew  up 
in  the  case  of  food  supplies  a  spasmodic  traffic  of  con- 
venience. In  some  cases  a  friend  in  one  city  would 
send  to  a  friend  in  another  a  package,  basket,  or 
bundle  which  some  i)assenger  would  undertake  to  look 
after  on  the  way;  or  sometimes  the  conductor  or  bag- 
gageman would  undertake  the  service  for  a  considera- 
tion. Under  such  conditions,  all  the  risks  of  loss  thru 
lack  of  care,  is  well  as  all  the  risks  incidental  to  trans- 
portation, had  to  be  borne  by  the  shipper. 

In  1839,  the  modern  express  service  began  in  the 
venture  of  William  Herndon,  who  undertook  to  carry 
packages  between  New  York  and  Boston  at  fixed 
rates.  He  entered  into  an  agreement  with  the  Boston 
and  New  York  Transportation  Company,  a  water 
carrier,  and  the  Stonington  an  "  Providence  Railway, 
whereby  he  obtained  certain  privileges  for  carrying  on 
an  express  business.  By  the  former  company,  he  wns 
granted  the  right  to  transport  in  the  steamers  of  the 
company  })etween  Xew  York  and  Providence,  via 
Newport  and  Stonington  "not  to  exceed  once  in  each 
day  from  Xew  York  and  froai  Providence,  and  as  les^; 
frequently  as  the  boats  run  between  and  from  said 
places,  one  wooden  crate,  of  the  dimensions  of  five 


EXPRESS  SERVICE 


279 


feet  by  five  feet  in  width  aiul  hei^lit  and  six  feet  in 
length  (contents  unknown)  until  the  aist  day  of  l)e- 
ceniber  1839."  The  nature  and  extent  of  this  under- 
taking may  be  gathered  from  a<lvertisements  pub- 
lished in  two  Hoston  papers  in  the  latter  part  of  1839, 
in  which  he  stated  that  he 

will  niii  a  car  through  from  Boston  to  \ew  York  ard  vice 
virsa  via  Stonington,  with  mail  train,  daily,  for  the  purpose 
of  transporting  specio,  small  packages  of  goods,  and  bundles 
of  all  kinds.  Packages  sent  by  this  line  will  be  delivered 
on  the  following  morning,  at  any  part  of  the  city,  free  of 
charge.  A  responsible  agent  will  accompany  the  car,  who 
uill  attend  to  purchasing  goods,  collecting  drafts,  notes 
and  bills,  and  will  transact  any  other  business  that  may  be 
entrusted  to  his  charge. 

In  18j.5,  the  American  Railroad  Journal  strongly 
urged  that  the  express  business  should  be  done  by  the 
railway  without  the  use  of  any  intermediary.  There 
were  still,  however,  difficulties" in  the  way  of  thru  lines 
of  traffic,  altho  the  consolidation  of  the  various 
small  lines  was  already  uuvier  way.  The  xYm^rican 
Express  Company  w\is  founded  in  18,50  as  a  rt  dt  of 
: .'.e  consolidation  of  two  private  companies.  In  1854, 
Ilerndon's  Company  and  thiee  others  were  consoli- 
dated into  the  Adams  Express  Company.  In  the 
same  year  the  United  States  Express  Company  was 
organized.  The  discovery  of  gold  in  California  in 
1 81-9  led  to  the  creation  of  various  pony  express  com- 
panies. The  companies  so  organized  were  consoli- 
dated in  1866  under  the  name  of  the  Wells  Fargo 
Company.     In  general,  it  may  be  said  that  in  the 


il 


I    MZIU 


[] 


H'^^h       t^-.        i 


S80 


INLAND  TRAFFIC 


United  States  the  handling  of  express  business  by  ex- 
press companies  was  well  established  at  the  outbreak 
of  the  Civil  War. 

3.  K.vprcsH  companies  in  Canada.—lw  the  United 
States  the  express  companies  grew  up  independently 
of  the  railways.  They  have  in  later  years  come  into 
very  close  relationship  with  them.  In  various  cases 
the  holdings  of  stock  in  express  companies  by  particu- 
lar railway  groups  gave  the  interests  controlling, 
these  practical  control  of  the  express  companies  as 
well.  In  Canada,  from  the  outset,  the  express 
companies  have  been  the  creations  of  the  railway 
companies. 

There  are  operating  in  Canada  today  various  Amer- 
ican express  companies,  under  the  name  of  the  Amer- 
ican Railway  Express  Company.  The  Canadian 
Companies  are  the  Donunion,  Canadian,  Canadian 
National,  Central  Canada,  and  British  America. 

The  Canadian  Express  Company  was  organized  in 
I860  with  a  nominal  capital  of  $500,000,  subscril)e(l 
capital  of  $275,200,  of  which  10  per  cent  was  paid  in. 
The  capital  stock  of  the  company  was  purchased 
in  1801  l)y  the  Grand  Trunk  for  $660,000  in  cash. 
The  stock  of  the  c()nn)any  is  held  in  trust  for  tlu- 
Grand  Trunk  by  a  body  of  trustees  who  are  all  di- 
rectors of  the  Grand  Trunk. 

The  Dominion  P'.xpress  Company  was  incorporated 
in  1882  with  a  capital  of  $1,000,090.     When  the  com 
pany  began  business,  10  per  cent  of  this  had  been  paid 


EXPRESS  SERVICE 


281 


up.     The  stock  of  the  eoinpany  is  held  in  trust  hy  its 
(lireetors  lor  the  Canadian  J'aeifie. 

The  Canadian  Xational  Express  Cornpaiiy  was 
or^rani/ed  in  11)02  with  a  nominal  capital  of  S<1,()0().- 
(KM):  $;}(K),OaO  of  this  was  issued;  .%->,000  was  paid  in 
cash:  of  the  halance,  five  slujres  went  t(»  tjiialify  cer- 
tain shareholders,  while  the  remainder  went  t(»Mac- 
Kenzie  and  Mann,  who  thus  thrn  stock  owiiership  con- 
trol the  company.  The  stock  is  now  owned  hy  the  C'a- 
na(h'an  Northern,  a  part  of  the  Canadian  Xational 
Kailways. 

4.  Arrmujemcntit  xcitfi  raihvaf/s.-  \i\  general  the 
express  company  pays  the  railway  over  whose  lines  it 
operates  an  af,n-eed  percentage  of  the  «.ross  earnin^rs. 
For  example,  the  Canadian  Express  Company  pays 
the  (irand  Trunk  M)  per  cent.  The  halanceOf  the 
earnin^rs,  after  the  deduction  of  operatin^r  char^res, 
^^•oes,  on  account  of  the  fiduciary  relationship  of  the 
express  company  to  the  railway,  "to  the  Crand  Trunk. 

The  operation  of  an  express  company  is  not  limited 
to  the  lines  of  the  railway  which  controls  it.  The 
smaller  railways  have  no  separate  express  comj)any 
service  of  their  own,  and  enter  into  relationships  with 
one  or  other  of  the  express  comi)anics  already  re- 
ferred to.  For  example,  the  Canadian  Express 
Company  has  contractual  relationships  with  the  fol- 
lowing: Quebec,  3Iontreal,  and  Southern:  Quebec 
Oriental:  Inverness  Railway  and  Coal  Company; 
St.  Martin's;  Windsor,  Essex,  and  Lake  Shore:  the 
Canadian  Goverimient  Railways  and  others.     The 


ffi 


282 


INLAND  TRAFFIC 


Dominion  Kxpress  Company  als  »  operates  over  the 
Canadian  Ciovernment  Railways. 

In  the  contracts  referred  to,  the  Canadian  Express 
Company  iiays  the  railway  percentages  varying  from 
4(>  per  cent  to  .>()  per  cent  of  the  gross. 

While  the  Dominion  Kxpress  Company  enters  into 
arrangements  with  different  railways  on  a  percentagi 
hasis  of  division,  its  arrangement  with  the  Canadian 
Pacific  is  on  a  toimage  hasis.  Under  the  agreement 
hetween  the  Kxpress  Company  and  the  Canadian 
I'acific,  it  is  hound,  urdess  it  receives  written  permis- 
sion from  the  railway,  to  charge  for  the  express 
traffic  per  hundred  poutids,  a  sum  not  less  than  twi) 
and  a  half  times  the  railway's  regular  first-class 
freight  rates  per  hundred  j)ounds  hetween  the  points 
where  the  express  packages  are  moving.  The  Kx- 
pres.^  Company  is  ohligated  to  pay  to  the  railway 
$100,000  a  month,  plus  such  additional  sum  as  will 
result  in  there  heing  paid  to  the  railway  on  express 
traffic  moved  hetween  any  two  given  points,  the  same 
earnings  per  hundred  pounds  as  would  he  afforded 
hy  1,50  per  cent  of  the  first-class  rate  per  hundreil 
j)ounds  hetween  the  same  points.  The  amount  of 
$100,000  mentioned  is,  under  the  agreement,  suhject 
to  revision  every  two  years. 

5.  Proriffous  of  an  agrccmcut. — The  nature  of  the 
relations  hetween  an  press  company  and  the  rail- 
way in  control  may  L^  gathered  from  the  agreement 
entered  into  hetween  the  Canadian  Pa^.ric  Railway 


3Lt-u. 


KXPHKSS  SKHMCK 


HSU 


ami  the  DomiFiu,,,  Kxpicvs  C  ompjuiN  on  Jaimarv  1 
11)07.  *  •      ' 

The  raihvay  took  over  the  Kxpress  C'ompanv  with 
tlie  ohjeet  of  eamiu^r  „„  over  its  laihvav  an  el'lieient 
txpress   seniee   under   ;      fled   management. 

'."/if  litiihca/j  covenanted — 

(1)  T«.  transport  .xpr.ss  ,natt..rs  o„  ,,a>..,.^M,-  trains 
«.tl.  a>  n.uci,  pron.ptn.s,  and  .lispat.l,  as  i.  n>„,,l  an.l 
na.M.nahU.  a.ui  m-cossarv  for  tl...  i„tuv>ts  of  Hu-  V.^uv.'.s 
'  onipanv.  \  ' 

(^J  To  furnisl,  m.cvssarv  spare-  on  its  ,>,;.M.n^r..,  ,,„i„, 
tor  such  transportation. 

V'U  To  carry  the  nusscn^nrs,  safes  and  trunks  of  the 
Kxpress  (onpany,  af  the  rate  of  JiL.  cent>  per  nnle  for 
file  messengers, 

(  +  )  T.)  furnish  free  of  charge  all  nec^sarv  ingr,  ss  and 
.gross  to  and  tro.n  stations,  an,l  such  space  on"  station  phit- 
onps  as  is  necessary  for  ioadii-g  and  unloading,  pn.vi.led 
tlie  railway  s  business  is  not  interfered  with 

{.■))  The  railway  to  he  liable  tor  the  ,1,  uth  or  personal 
mjury  of  a„.v  agent  or  employe  of  the  railway,  if  acting 
jointly  tor  the  railway  and  the  express  companv" 

(6)  Tlie  railway  to  <lo  all  it  can,  as  far  as  lawful  and 
consistent  with  Its  own  interests,  lo  advance  the  interests 
ot  the  Ivxpress  Company,  and  not  to  afford  anv  other  com- 
pany more  favorable  express  facilities. 

The  Express  Compan//  covenanted — 

(1)  To  <arry  on  an  efficient  express  servue  over  the 
«l'ole  system  of  the  railway  and  not  to  <lisc.,ntinue  or 
.Imunis^i  such  service  on  any  part  of  the  system  on  the  grou.ul 
<)t  its  bemg  unprofitable. 

(!2)   roni],ensation  to  be  as  already  indicated. 

(-  )    lo  carry  moneys  and  v.duabl-^  -ackages,  being  liable 

he  .ulway  therefor,  except   w  ,ss,  ^..nagc'^..  de- 

MUlt  IS  caused  •  -  ■      ■  " 


IS  caused  by  accidents  to  t 


rai 


^i  railway, 


ii84 


INLAND  THAFFIC 


H 


(4)  T»i  iitiivi'  Hiid  forwanl  ixpn-ss  nmtttr  ortVmJ  it  bv 
tlu'  publir,  ixtipt  siifli  us  is  of  a  (liiii^ftnuis  natu'v. 

(5)  To  l)f  liable  for  death  or  injiirv  to  its  otfi(tr>,  a^'eiits 
or  iinplons  not  also  aitin^'  at  the  tinii-  of  iniurv  a,  joint 
agents. 

(())  To  bo  liable  for  loss  or  damage  to  express  inattir, 
exc't-ijt  where  oeeasioned  bv  aceidents  to  the  railway's  trains. 

(7)  To  furnish  the  railway  daily  stateuunU  of  tli. 
weights,  and  niontbly  statements  of  the  weights,  earnings  and 
exjienses. 

The  Part  it. s  iniitually  ogriiil — 

(1)  The  agreement  to  run  for  ten  years. 

(2)  Station  agents  and   train  baggagemen  may  al.M)  be 
come  agents  of  the  express  company  so  far  as  the  railway 
considers  compatible  with  efficient  peVformanc^   .,*'  their  duty. 

(3)  Where  acconunodation  is  afforded  at  stations  to  tin 
express  company,  it  is  to  pay,  in  monthly  pavnienN,  eight  per 
cent  per  ainium  on  the  actual  yalue  of  ^he  land,  building  or 
buddings,  or  portion  of  building  or  buildings,  safes  and 
trunks,  etc.,  given  up  to  the  use  of  the  Express  Company 

(4)  Disputes  as  to  the  construction  of  the  agreement  or 
the   rights  and   liabilities   thereunder  to   be  settleii   bv   arbi 
t  ration. 

(5)  Milk  traffic  on  passenger  trains  is  exempted  from  tli, 
scope  of  tile  agreement. 

0.  Arrangements  rcith  agcnts.~The  e.\i)re.ss  coii.- 
pany  operates  not  only  ordinary  express  ears,  but 
alsv  refrigerator  ears  in  tlie  transport  of  fish  and 
fruit.  At  the  lar^^er  points  it  maintains  its  own 
salaried  agents.  At  tb.'  .s.naller  points,  the  raihvav 
station  agent  will  aet  as  a  joint  agent  of  tiie  expres> 
company  and  of  the  rail-ay.  He  is  paid  l)y  the  ex- 
press company,  in  the  ease  of  the  Canadian* Express 
Company,  by  a  commission   varying  from  2i .,  per 


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c  c^  o  >  a 

:   £5Su    ^ 
5  £  =  t  ■^^■ 

w  £  a  "  o  t" 

_    -    1^=   c   * 
"■BTS  «,S  I, 

S  c  i(  C  jjS  S 

=  t«§.§t:f 

c  '^^   »  >i  4  Z! 
♦J  ^  ^  e  c  ^  * 

e-  O  fc«  -  ■*^  2 

»  *  «^  r;—  E 


cc  o  o 


-.5  § 


■     c  '^  3  »i  -      >» 

^  -  '^  a  t;  -. 

2.-0 1^  o  2-2 
i  S  a  2  •-  «  o 

5-§  i*  s-g  s 


•w  a 

o 

-c 


c 


?  o  « 


0.2 


CO 


(a 

OS 


J.IJi 

•t;  g  sa  ej 

.^      £  «  « 
■t;  «  c  fc.  M 

-s  i-jS  o  c 

B  ""  C  "r;  r    -a: 

.~     7}     C     "^  = 


2-" 


>.^^ 


m 


o 


_C3 

'S 


03 


O 

0) 


•o  3 
go 


w  a> 

09  eS 
5 


O  - 


09 


O 


-a 


g 

.2 

*l 

e8 

n*' 

^ 

S  a 

.1 

1. 

3i 

> 

HU 

1 

Of  A 

and 

(3 

o 

4J 

A 

•c 

■ : 

u 

.1.1  . 

C      tc      -■ 
O      O      c 

O  Q  ;:: 


55*2? 


O'ri  >.-z  »J"^ 

C  —    83    *    5»  ~ 

to        O  *j        o 

-  >  s  r*r  5 

r  -^       i«  >  o 

S   «   =  -w   "- 


t    c    6^3     ST    3 


■n  ITS'      c: 

,  %-  -    3        TS 

I  O  y  -t  *.  2 

.  -.  3  O  ^C 


EXPRESS   SERVICE 


285 


cent  to  10  per  cent  of  the  gross  earnings  at  the  point 
in  question.  In  the  case  of  the  Dominion  Express 
Company,  he  is  paid  on  a  tonnage  basis.  The  result 
is  about  the  same  in  either  case. 

The  express  business  in  Canada  is  concerned  pri- 
marily with  a  movement  in  and  out  of  the  larger  cen- 
ters.    In  the  case  of  the  Dominion  Company,  it  is 
estimated  that  64  per  cent  of  the  business  handled  by 
It  originates  at  Montreal,  Toronto,  and  Winnipeg.' 
7.  Express  classification. —While  it  has  been  sug- 
gested that  the  freight  classification  might,  with  some 
necessary  amendments,  be  adopted  to  suit  express 
traffic,  there  exist  sufficient  difficulties  in  the  waj 
to  prevent  this.    The  great  hindrance  is  that  in  cities 
express  traffic  is  collected  in  large  quantities  and  de- 
livered just  as  trains  are  departing,  when  there  is  no 
time  to  handle  it  under  freight  classifications. 

The  express  classification  in  use  has  first  to  obtain 
the  formal  sanction  of  the  Board.  The  Railway  Act 
states  that  all  its  provisions  "applicable  to  freight 
tolls  and  freight  tariffs,  in  so  far  as  such  provisions 
are  applicable  .  .  .  shall  apply  to  express  tolls  and 
tariffs." 

In  express  classification  the  nature  of  the  business 
prevents  the  use  of  a  system  of  subdivision  into  a  con- 
siderable number  of  classes.  In  general,  it  may  be 
said  that  the  classification  of  commodities  is  baseil  on 
the  rate  the  commodities  take.  Express  shipments 
ii  oadly  distinguished  as  "freight"  and  "money." 
L       r  "money     are  included  not  only  shipments  of 


III 


XV  c— 80 


Mi^ll 


2HG 


INLAND    TRAFFIC 


actual  money,  but  also  of  bullion,  stocks,  bonds,  valu- 
able paj)ers,  and  various  articles  in  unusual  value. 
Prior  to  the  Judgment  of  the  Board  In  re  Ecvprcss 
Kates  in  1019,  "freight"  shipnjents  were  sub-classed 
as  "merchandise,"  "general  special"  or  Scales  X  and 
Scales  K,  M  and  Section  1).  There  were  also  sj)ecial 
scales  and  rules  covering  shipments  of  "money." 
"Meichandise"  rates  were  those  applying  on  commod- 
ities for  which  there  were  no  special  rates. 

Scale  K  was  a  special  tariff  on  ale,  aerated  waters, 
etc..  and  was  from  30  per  cent  to  M)  per  cent 
lower  than  "merchandise."  It  applied  at  pound  rates 
on  actual  weight.  Scale  M  was  a  special  tariff  on 
eggs  in  cases.  Scale  X  quoted  special  rates  on  per- 
isihable  foodstuffs,  such  as  provisions  and  vegetables; 
originally  it  was  concerned  simply  with  farm  prod- 
uce. Its  scope  had  been  widened,  so  that  in  the  grouj) 
of  forty-three  articles  covered  by  it  there  were  in- 
cluded, in  addition  to  provisions  and  vegetables,  the 
following:  cuttings,  fertilizers,  ])iants,  poultry  food, 
roots,  scions,  seeds  and  seed  grain,  stock  food,  tallow, 
trees  for  setting,  stearine  and  tubers.  Its  rates  were 
from  20  per  cent  to  30  per  cent  below  "merchandise." 

Section  D  rates  a})plied  on  packages  not  exceeding 
five  pounds,  of  books,  stationery,  lithographs,  periodi- 
cals, etc..  carried  in  competition  with  the  post  office. 
The  express  rates  were  lower  than  those  of  the  post 
office  on  packages  exceeding  five  pounds.  Section 
D  rates  were  one  cent  for  each  two  ounces  or  fraction 
thereof,  subject  to  a  minimum. 


EXPRESS   SERVICE 


287 


As  a  result  of  the  Judgment  above  referred  to, 
merehandise  is  now  subdivided  into  first-elass  and  see- 
ond-class,  the  second-ehiss  being  twenty-five  per  cent 
lower  than  the  first.  The  merehandise  rate  is  still 
exi)ressed  as  a  rate  per  hundred  pounds.  Various 
groupings  may  l)e  expressed  by  multiples  of  the  rat- 
ing, e.  g.,  elephants  erated  are  li  times  first-elass: 
pianos,  not  boxed,  1  \  times  first  elass. 

The  commodities  carried  under  Scales  X,  M  and  K 
are  now  placed  under  the  second-class  rating.  Section 
D  is  also  abolished  as  a  separate  rating,  and  the  goods 
covered  by  it  come  under  the  first-class  rating.  The 
Board  held  that  there  was  no  principle  under  which 
the  articles  moving  on  this  scale  were  of  right  entitled 
to  any  better  classification  than  general  merchandise. 

8.  Value,  xveight  and  .space. — In  the  classification 
ratings,  value,  weight  and  space  are  considered. 

The  value  of  the  article  is  considered,  since  the  nor- 
mal rate  is  based  on  a  value  per  })ackage  not  exceed- 
ing $.50.  If  the  shipper  desires  the  company  to  as- 
sume a  liability  in  excess  of  this  sum,  he  has  to  pay 
adduional  charges,  which  are  known  as  valuation 
charges.  These  are  imposed  on  the  excess  value  for 
each  $100  value,  or  fraction  thereof,  as  follows: 

Where  merchandise  rate  is  $1  or  loss,  per  TOO  lbs..  .  5c. 
Where  merchandise  rate  is  .$1  to  pi  per  100  ll)s. .  .  10c. 
Where  merchandise  rate  is  $.'3  to  $8      per  100  lbs..  .    loc. 


Wliere   mcrcliandisc    rate    is    over    >!S 


|HT    100   lbs..  .    20c 


In  the  matter  of  weight,  shipments  of  extraordi- 
nary weight  or  size  are  carried  only  under  special  con- 


>  i  |; 

X    !   fit 


2HH 


INLAND   TKAVKic 


tract.  The  factor  of  wei^iil  is  considered  in  connec- 
tion with  packages  of  less  than  100  pounds  weight. 

Space  is  recognized  hy  the  provision  that  conven- 
tional weights  shall  apply  in  the  case  of  light  and 
hulky  goods,  e.  g.,  millinery  shipments. 

On  r'onij)utations  made  hy  the  Dominion  Express 
at  one  time,  47  per  cent  of  the  shipments  move  on  the 
merchandise  rate;   the   halance  are  on   lower   rates. 

In  the  amendment  of  the  Classification  hy  the 
Board  in  the  express  investigation,  the  owner's  risk 
c()n<litions  were  eliminated. 

0.  Conditiotifs  of  carriaf/c. — In  the  merchandise  re- 
ceipt the  liahility  is  limited  to  $.50  per  shipment, 
except  where  a  higher  value  is  declared  and  inserted 
in  the  receipt.  In  the  express  investigation,  the  ex- 
press receipts  which  hitherto  gave  the  companies  a 
very  wide  exemption  were  redrafted.  The  company 
is  not  liahle: 

(a)  For  differences  in  weight  or  quantity  caused 
hy  shrinkage,  leakage  or  evaporation. 

(b)  For  loss  or  damage  occurring  after  forty- 
eight  hours  (exclusive  of  legal  holidays)  after  notice 
of  the  arrival  of  the  shipment  at  destination  or  at 
])oint  of  delivery  has  been  mailed  to  the  address  of  the 
consignee,  unless  such  loss  or  damage  was  due  to  neg- 
ligence of  the  company. 

(c)  For  loss  or  damage  which  can  he  met  hy  the 
common-law  defenses. 

(d)  For  loss  or  damage  occurring  in  a  custom 
warehouse. 


Wt;/- 


>C't'"t;.T,'y.-i 


T.H 


EXPKKSS  SKHVK  i: 


ilH\) 


(e)  For  loss,  daina^e,  or  delay  resulting  from  im- 
proper or  insufficient  packing-,  sec'iirin«'-,  or  addross- 
in^r,  or  from  chafing  wluii  ^oods  are  packed  i'l  hales. 

(f)  For  loss  of,  or  damage  to,  any  fragile  article, 
unless  the  carrier  was  negligent. 

(m)  For  loss  or  damage  from  delays  heyotid  the 
company's  control. 

(h)  For  loss  or  damage  arising  out  of  examina- 
tion, or  partial  delivery  to  the  consignee,  of  C.  (),  I), 
shipments. 

(i)  For  (hunage,  loss  or  partial  shortage,  uidess 
written  notice  is  given  hy  the  shipper  at  some  ofHee 
of  the  company  within  thirty  days  froni  delivery. 

( j )  For  loss  or  damage  occurring  to  shipments  ad- 
dressed to  stations  where  there  is  no  agent  of  the  com- 
pany, after  the  shipments  have  heen  left  at  such  sta- 
tion. 

(k)  For  non-delivery,  loss  or  destruction  in  C'an- 
ada,  unless  written  notice  is  given  hy  the  shipper 
within  four  months  from  tliC  time  delivery  should,  in 
the  ordinary  course  of  transit,  have  heen  made. 

10.  Liabilitij  under  revised  ed' press  reeeipt.— 
Under  the  express  receipt,  as  revised  in  the  expiess 
investigation,  the  express  company  was  not  liable 
for  any  loss,  damage  or  delay  caused  hy  conditions 
beyond  its  control.  This  condition  exen)j)ted  it  from 
such  loss,  damage  or  delay  caused  by  the  railway  com- 
pany. The  express  company,  while  performing  a 
transportation  service,  was  a  separate  corporate 
entity.     The  acts  and  defaults  of  the  railway  were 


i  ! 


290 


INLAND  TRAFFIC 


heyond  its  control.  In  1{)1.>,  this  was  amended  so 
that  tlie  express  eonipany  was  liahle,  if  the  loss  or 
(laina^v  was  caused  by  the  iie*^ licence  of  the  railway 
company  upon  whose  trains  or  property  the  shipment 
was  at  the  time  such  loss  or  damage  occurred. 

11.  Linhililics  under  various  fitrmn  of  receipts. — 
The  word  "company,"  as  used  in  this  receipt,  includes 
any  comicctin^-  express  company  subject  to  the  Kail- 
way  Act.  The  a/'-reement  entered  into  hy  the  si^n- 
in^-  of  the  receipt  is  binding-  on  the  shi[)per  and  all 
persons  in  privity  with  him,  and  inures  to  the  benefit 
of  any  person  or  company  to  whom  the  shipment  may 
be  delivered  for  the  performance  of  an  express  serv- 
ice. 

There  is  a  money  receipt,  the  conditions  of  which,  in 
respect  of  liability,  are  subject  to  modifications  due  to 
the  difference  in  the  nature  of  the  commodities— sub- 
stantially the  same  as  in  the  case  of  the  merchandise 
receij)t. 

In  the  C.  O.  D.  receipt  covering  collections  by  the 
company,  the  common-law  defenses  apply;  in  addi- 
tion, the  company  is  exempt  from  liability  for  loss  by 
fire  unless  there  has  been  negligence.  It  is  also  free 
from  liability  for  loss,  damage  or  delay  resulting  from 
im[)roper  or  insufficient  addressing  or  securing. 

lender  the  livestock  contract,  the  comi)any  is  ex- 
empt from  liability  for  delay,  injury  or  loss  from  any 
cause  whatsoexer  unless  there  has  been  negligence. 
The  attendant  accompanying  the  animals  is  required 


KXPRKSS   SIlKMCi: 


•-'i>l 


to  M^ii  a   release   from   all   liahility.   iic^rji^rt.iu.f    ii,- 
eliided. 

12.  Standard  mdiaffc  lari/fs.  The  staiidaid  miU- 
n^v  tariir  ^nvcs  the  inr.vliaiidise  rate.  Tjie  l.a^i^  of 
such  a  tariff  is  the  (luestio.i  of  the  division  of  hrii- 
torv  into  mileage  hloeks. 

When  the  ^reiieral  investi^r;,tioii  of  express  ijiles 
was  eondiieted.  the  Hoard  found  that  west  of  North 
Hay  no  sueh  exaet  arrau^rnnent  as  that  east  tiiereof 
existed  as  to  the  mileage  groups.  Kaeh  standard 
tariff'  had  its  own  particular  mileage  grouping,  and 
the  groups  were  irregular  and  overlapped.  Direc- 
tion was  therefore  given  that  there  should  he  a  rear- 
rangement with  a  view  to  approximating  uniformity, 
so  that,  for  example,  any  two  or  more  of  the  western 
groups  should  he  equivalent  to.  and  included  in.  the 
eorresDonding  eastern  group,  instead  of  the  relation 
heing  fractional,  as  it  then  was. 

The  Eastern  and  Lake  Superior  standard  scales 
then  met  at  North  Hay.  Direction  was  given  that, 
to  harmonize  with  freight  conditions,  the  rates  should, 
instead,  hreak  at  Sudhur /. 

The  meeting  point  of  the  prairie  and  the  mountain 
express  standard  i>iileage  scales  had  hitherto  heen  at 
^lacl.eod  and  at  Calgary.  Direction  was  given  that 
the  rates  should  break  from  one  scale  to  another  at  the 
points  where  the  rates  hroke  in  the  ease  of  freight 
rates.    The  direction  published  was.  in  si"..mary: 

(1)  That  there  shall  be  four  "standard"  mileage- 
basing  scales,  viz. : 


292 


IM.AM)   THAI'FR 


(a)  On  all  liius  oast  (if  and  including  Wind- 
sor and  SiKJhury.  cxrhiding  the  lines  ol"  the  Teni- 
iskarning  and  Northern  Ontario  Hailwav. 

(h)  On  all  lines  west  of  and  including  Sud- 
bury, to  and  including  Sault  Stc.  Marie,  Crow's 
Xest,  Caiunore,  and  Thornton,  iVlherta;  also 
north  of  and  including  North  Hay. 

(c)  On  all  lines  west  of  and  including  the  ter- 
minal points  set  out  in  the  preceding  section  to 
the  Pacific  Coast  and  to  \'ancouvcr  Island  trans- 
fer points. 

(d)  In  Vancouver  Island. 

(2)  That  the  basis  of  (a)  should  not  exceed  $.3, 
of  (h)  ^5,  of  (c)  *0.  per  100  pounds  for  the  1)00- 
1,000  mile  group.  In  Vancouver  Island,  the  mile- 
age groups  were  to  he  harmonized  without  increasing 
the  rates. 

The  standard  rates  so  fixed  were  further  reduced 
hy  the  Board  in  April,.  1<)1;J.  when  it  was  directed  that 
instead  of  the  $.5  and  $(>  rates  already  referred  to 
there  should  be  substituted  rates  of  $4  and  .$4.7.>  re- 
spectively. 

I'.i.  Diffcrenccfi  in  traffic  conditions.— In  sanction- 
ing differences  in  rate  basis  as  between  the  sections 
co\ered  by  the  different  tariff's,  differences  in  traffic 
conditions  were  recognized.  In  rearranging  rates 
under  its  recent  decision  on  express  rates  in  the 
United  States,  the  Interstate  Commerce  Commission 
has  taken  a  similar  position.  The  following  words 
are  from  its  judgment: 


KXI»HI:SS    SFIIVICK 


'JWI 


Wf  liav«',  theivfoif,  tVIt  that  it  Ma>  iuti>>aiv  for  us  to 
r.cogiii/i  till-  vuriafioii  in  tlu-  <liiisit  v  ot  tniHic  niul  ot  popula- 
tion and  in  tlif  t'X|Hn>  of  o|HTatiii;,r  railroads  in  tin  dithrmt 
Mttions  of  the  country.  With  this  in  mind  a>  a  l)asi,  f,,,-  tli« 
formation  of  rates,  tlii"  tountrv  has  hv,u  divid«i|  into  fi\r 
^M-and  siihdivisions,  Tlu'so  .subdivisions  loriform  ^r.tuiallv 
to  tliOM  r«  co^rni/id  hv  thr  rail  nirritrs,  and  which  this  Coni- 
mission  has,  in  th«'  consideration  of  frei^r|,t  rates,  Ixen  hd  to 
heliive  were  ha.sed  upon  actual  diflereiices  in  operating'  and 
traffic  conditions. 

Following  out  the  practice  luiiiii  laid  down,  the  In- 
terstate C'omineree  C'oiimiissioii  reeo^iii/es  five  zones, 
dirteriii^  in  traffic  and  in  population  density,  and  has 
ad  justed  rates  with  this  dift'erence  in  mind. 

14.  Four  standard  tariff's.— As  a  result  of  the  va- 
rious steps  set  out,  four  standard  tariffs  were  estah- 
lished.  The  following  tabular  suniniary  ^ives  a  ^'en- 
eral  idea  (»f  the  rate  arrangement. 


A 


'J.5  iniU's  and  iiii(i«T. 

I<H>  iiiilts  ,iiu!  under. 

1i»»<>  Miilfs  and  under. 


I) 


I'Oniili 

^  and 

-•)  miles  and 

!i<  .K) 

Jji    ..">() 

under. 

S  .-){) 

under.  ."«!    50 

.75 

I.(HI 

I..'.-| 

1.00 

3.(M> 

^00 

t.7-i 

The  IJoard  found  that  in  the  traffic  between  the 
l)rairie  section  and  liritish  Columbia  the  practice  was 
to  make  up  a  thru  rate  by  adding  the  two  tariffs  to- 
gether. In  order  to  bring  about  uniformity  and 
lessen  the  burden  of  rates,  direction  was  given  that  on 
interdivision  traffic  which  was  not  subject  to  the  Sud- 
bury basing  schedule,  or  tariff*  mentioned  below,  the 


K^^X.sH'jm 


wav^/i-ijp 


294 


INLAND   TRAFFIC 


highest  staiKhird  mileage  seale,  as  applied  to  the  thru 
mileage,  should  govern  in  either  direetion. 

lietvveen  points  east  of  Sudbury  and  points  west 
thereof,  thru  rates  were  built  up  by  adding  to  the 
loeal  rate  east  of  Sudbury  a  speeial  basing  tariff  west 
thereof,  whieh  latter  is  assumed  to  be  lower  than  the 
Sudbury  loeal  tariff.  Direetion  was  given  that  the 
system  imght  be  eontinued,  provided  the  thru  rates 
were  less  in  all  eases  than  the  sum  of  anv  tariff  rates 
to  and  from  Sudbury,  and  were  not  greater  than 
the  higher  standard  tariff  as  applied  to  the  thru  mile- 
age from  the  ])oint  of  origin  to  destination.  The 
Sudbury  basing  seale  was  eontained  in  the  Dominion 
Kxpress  Company's  loeal  mileage  basing  tariff. 
Sehedule  *'?.."  This.  then,  set  out  the  speeifie  rates 
for  mileage  west  of  Sudbury  whieh.  when  added  to 
the  rates  east  and  south  of  Sudbury,  would  give  the 
thru  rate  to  destination,  exee])t  where  the  standard 
tariff  west  of  Sudbury  applied  to  the  thru  mileage 
gave  lower  thru  rates. 

As  a  result  of  the  Judgment  of  1010,  a  still  further 
sim])lifieation  and  systematization  of  standard  tariff's 
and  the  territories  to  whieh  they  !ipi)ly  has  been  made. 
There  are  nov»  three  standard  territories: 

(A)   As  jit   ])rcsont. 

(R)  Tlu>  only  clian^e  in  this  territory  is  to  inohule  witliin 
it,  for  all  movements,  })oints  on  the  TemJNkamin^  and  N'ortli- 
ern  Ontario   Railway. 

(C)  The  only  change  here  is  to  include  in  this  aria  Van- 
couver Island,  which  was  formerly  classed  under  Standard 
tariff  D. 


■P 


m^mm 


^.LfH^^il 


:::-...  ,:t^f^: 


M^i^m^tjs^ism. 


EXPUKSS    SKKVICE 


2i)o 


There  are,  therefore,  now  three  standard  zojies  —  the 
eastern,  j)rairie,  and  mountain,  \ancouver  I>land  heni"-  in- 
rjuded  in  tl>e  latter. 

As  a  resii!  v.f  the  readjustnient  of  rate  bases,  vvhieh 
is  dealt  Mth  latrr.  ■■..  rearrangement  has  heen  made 
whieh  m;  V  he  indie  ited  hy  a  tabnlar  summary.  For 
j)urp()ses  of  eoiii|,va*ison,  reference  to  United  States' 
rates  is  also  given. 


Eastern  Zont' 


Prfiiric  Zone 


Mountain  Zunc 


Canada         I'.  S.       Canada         l\  S.        Can.id.i         T.  S 
Milt's  A  Zone  1  R  Zone:?  C  Zone  I 


Cents 

Cents 

Cents 

Cents 

(%-nts 

Cents 

50 

80 

82 

85 

8H 

<to 

I.'ii 

500 

260 

203 

310 

297 

360 

3T1 

1,000 

460 

2f>l 

5t!() 

481 

6«>() 

(i(»5 

2,000 

660 

405 

8(iO 

S(i3 

lOfiO 

1<»72 

2,500 

•   .  • 

.   ,   . 

f)<iO 

1023 

n65 

12W 

15.  Local  and  transfer  tariffs. — The  rate  prac- 
tice prior  to  1919  was  that  local  tariffs  set  out 
the  rate  per  100  pounds  between  points,  sucli 
rates  applying  either  way.  Tlic  rates  were  (pioted 
specifically  from  point  to  point.  Tariffs  dealing  with 
such  rates  were  extensive  and  cumbrous.  For  ex- 
ample. Local  Tariff  Xo.  20  of  the  Dominion  Express 
Company,  applica])le  to  sliipments  between  points  in 
the  Province  of  Que])ec  and  points  in  Alberta  and 
T?ritisli  Columbia,  in  its  271  pages  quoted  rates  from 
5.50  initial  points  to  .551  destinations. 

Where  a  two-b*ne  movement,  for  whicli  no  tliru  rate 
had  been  provided,  took  place,  this  necessitated  the 
use  of  a  transfer  tariff  which  set  out  rates  to  ba«'ng 


^f^^ 


ic^::-h1(v 


290 


INLAND    TRAFFIC 


transfer  points.  That  is  to  say,  tlie  use  of  the  rate  to 
the  transfer  point  plus  the  loeal  of  the  conneeting  hne 
heyond  wouhl  give  the  thru  rate.  Under  this  s,»  stem, 
the  faet  that  in  various  eases  tliere  were  a  nnniher  of 
transfer  })()ints  and  different  rates  niig'  t  lead  to  over- 
eharges,  notwithstancHng  that  the  agent  was  in- 
strueted  to  eharge  on  the  lowest  thru  rate.  In  Ihc 
hurry  of  shipment,  the  lowest  eombination  might  he 
overlooked. 

Reeogni/ing  the  disadvantages  attaehing  to  the  ex- 
isting rate  system  and  the  faet  that  the  system  of 
hloek  tariffs,  whieh  was  in  foree  in  the  United  States, 
was,  heeause  of  its  greater  sim])licity,  less  liable  to 
cause  mistakes,  the  Board  authorized  in  1019  the  use 
of  this  system  in  Canada. 

Subse(iuent  ^  )  the  adoption  of  this  system  in  tiie 
United  States  in  1912,  it  was  applied  on  international 
express  tariffs  between  points  in  the  United  States 
and  points  in  Canada. 

The  block,  as  adopted  in  Canada,  measures  half  a 
degree  each  way  as  compared  with  the  United  States' 
block  which  measures  a  degree  each  way. 

The  block  system  simplifies  tariffs  in  that  the 
agents  do  not  need  to  have  a  large  and  cumbrous  set 
of  tariffs.  Instead  of  each  company  having  its  own 
series  of  tariffs,  all  companies  are  represented  in  a 
single  series  published  for  and  on  behalf  of  all.  The 
difficulties  as  to  accuracy  in  quoting  thru  rates  dis- 
appear with  the  provision  that  between  two  common 
points  the  shortest  single  line  mileage  governs  the 


KXJMIKSS    SKHVICI:  207 

rate;  and  no  higher  rates  are  eharged  for  carriao-e 
Mi.ere  the  serviees  of  tvv(,  or  more  eonipanies  haveh. 
hv  used  than  for  a  similar  mileage  of  a  single  eompany 
10.  Nates  as  affected  %  quautitu.-lu  general,  the 
faetors  whieh  affeet  express  rates  are  mere  elearlv 
analogons  to  those  affeeting  passenger  rates  than  to 
those  affeeting  freight  rates.     From  the  standpcnnt 
of  cost  of  serviee,  the  differenee  hetween  the  eapitali- 
zation  m  ordinary  freight  busine  vs  and  that  in  express 
serviee  is  attributable  to  the  faet  that  the  former  is  •, 
trans])ortation  business,  while  the  latter  is  more  of  •,!> 
ageney  business.     The  charge  of  the  latter  is,  there- 
fore, not  necessarily  looked  at  from  the  standpoint  of 
the  return  on  capital  invested,  but  from  the  question 
(»t  what  is  the  rate  of  pn.fit  on  the  turnover. 

AVhile  competitive  conditions,  such  as  water  and 
inarJ-  valry.  exercise  an  important  effect  on  freight 
rates.  express  rates  the  ease  is  different.     Walter 

competition  certainly  cannot  be  said  to  inffnence  in 
any  way  a  serviee  the  essential  of  which  is  speed-  nor 
IS  the  express  service  inffuenced  in  nearlv  the  same  de- 
gree as  freight  by  tlie  (|uestion  of  competitive  points. 
In  the  Judgment  of  1010.  the  I?oard  took  the  posi- 
tion that  t.e  practice  of  multiplying  the  existing  first- 
class  standard  rates  was  unsound.     It  was  held  that 
there  should  be  two  factors~a  c.mpensation  for  rail 
service:  and  a  compensnt!r»n  for  express  comi)anies' 
work.    The  following  language  was  used : 

In  consulerinc?  tl.o  cxpr.vss  rate  I  uould.  tl.oroforo.  adopt 
as  the  basis  for  rail  service  one  and  a  half  Hnies  the  frei-ht 


•■l; 


K«>l        j!--i' 


mm 


298 


INLAND    TKAIFIC 


rate.  To  this  a  sum  must  be  added  to  cover  the  express 
ooinpauies'  service.  The  work  of  the  express  companies 
consists  of  billing  aiul  shipments,  loading  them,  accompanv- 
ing  the  transportation  movements  by  messeiigir>,  unh)ad- 
ing  at  point  of  destination.  .  .  .  Over  and  above  this 
it  also  inchi(hs  in  all  instances  the  necessary  clerical 
work  and  auditing  .is  v.ell  as  liability  for  loss  and  damage 
claims. 

In  working  this  out,  the  distances  for  each  scale  u}) 
to  1000  miles  were  sulnHvided  into  blocks  of  50  miles 
for  each  of  which  blocks  one  and  one-half  times  the 
standard  first-class  freight  rate  was  computed.  This 
gave  for  each  1000  miles,  under  cj  ch  scale,  twenty 
sets  of  block  rates,  on  the  basis  of  one  and  one-half 
times  the  first-class  freight  rates.  Taking  the  aver- 
age of  the  sum  of  the  rates  for  each  twenty-block 
group  under  its  respective  scale,  the  result  is  for  the 
Eastern  Scale,  20  cents:  Prairie  Scale.  2.5  cents;  and 
for  the  Pacific  Scale.  30  cents.  Adding  to  each  of 
these  60  cents  to  cover  exjjress  companies'  work  the 
resultant  standard  rates  for  100  pourids  for  a  .)0-mile 
distance  under  the  respective  scales  are  80  cents,  8.) 
cents,  and  00  cents.  The  rates  for  longer  distances 
are  a  matter  of  simple  computation.  For  exam])le. 
if  it  is  desired  to  compute  the  rate  for  3.50  miles  on  the 
Eastern  scale,  this  represents  seven  blocks  multiplied 
by  the  average  freight  rate  of  20  cents,  ])lus  00  cents 
for  express  companies'  services,  or  total  of  J^2.00  per 
100  pounds. 

On  this  basis,  th'^  Eastern  scale  works  out  at  227 
per  cent  of  the  first-class  freight  rate;  the  Prairie 


\r^*M, 


■Vv\  <  ', 


EXPRESS    SERVICE 


•J\)i) 


scale  at  217  per  cent;  and  on  tlie  Mountain  scale  at 
ID.'i  j)er  cent. 

17.  Firif/ht  rale  as  a  hasi.s.~Ai  times  the  ex- 
pedited .service  att'orded  in  express  luisiness  has  \.vvn 
expressed  as  a  niultii)le  of  the  first-class  liei<4ht  rate. 
Thus,  in  some  of  its  earlier  deci  ions  on  cxjiress  i  ates. 
the  Interstate  Commerce  Commission  held  that  an 
exj)ress  rate  of  three  times  the  first-class  frei<rjit  rate 
was  iiot  unreasonahle. 

18.  Special  circulars. — Commodity  rates  are  put  in 
force  by  special  circulars  (jUotin«r  mtis  per  hundred 
pounds.  These  may  he  limited  to  the  one-way  direc- 
tion, or  may  apply  "hetween'  points:  in  the  latter 
case  they  ai)ply  in  both  directions.  The  rates  (juoted 
in  special  circulars  imist  not  he  exceeded  hy  those  to 
an  intermediate  point  embraced  in  the  loii  .er  distance 
for  which  the  race  is  (pioted.  In  the  investi^ration  held 
in  11)11).  the  express  comj)anies  desired  to  eliminate 
commodity  rates  and  to  place  all  broods  so  carried  on 
classification  ratings.     This  was  refused. 

Instead  of  a  division  into  car-lots  and  less  than  car- 
lots,  in  freitrht.  in  the  ex|)ress  business  we  find: 

(1)  Car-lots.  e.  g.,  on  horses  and  poultry. 

Prior  to  1010.  there  was  also  the  "'.)()()  pound  spe- 
cial." I"^nder  this  a  rate  avera^inir  about  -22  per  cent 
lower  than  the  merchandise  rate  was  (pioted  for  AH) 
pound  shipments  of  merchandise  from  one  consifrnor 
to  one  consifrncc.  forwarded  at  one  time  and  on  one  re- 
ceipt. A  shi])ment  of  less  than  .)0()  pounds  had  the 
.)00  p>ound  rate  as  a  maximum.  In  g(.'neral.  any  article 


.'iOO 


INLAND   TRAFFIC 


of  a  higher  dassification  than  single  merchandise  rate 
could  be  carried  on  this  rate  basis. 

The  Judgment  of  1919  held  that  this  arrangement 
was  in  reality  a  freight  movement,  and  that,  in  addi- 
tion, it  gave  a  discriminatory  advantage  to  the  larger 
over  the  smaller  shipper  and  should  be  st'-icken  out. 

(2)    The  100-pound  rate  on  merchandise  and. 

(.'})  Packages  under  100  pounds  which  are  car- 
ried on  the  graduate  scale. 

19.  The  f/raduatc  tabic. — Approximately  90  })er 
cent  of  the  packages  handled  by  express  companies 
weigh  100  pounds  or  less.  The  Interstate  Commerce 
Commissi(m  in  its  investigation  found  that  ap- 
proximately one-half  of  the  express  business  c(m- 
sists  of  packages  under  20  pounds  in  weight,  and  that 
the  average  shipment,  including  carloads  of  horses 
and  of  fruit  and  vegetables,  is  84-  })ounds.  To  tjike 
the  business  of  the  Dominion  Express  Company  foi 
September  18.  1912,  as  an  example — when  a  compu- 
tation was  made  in  which  the  same  average  was  ap- 
plied to  the  year's  l)usiness.  it  appeared  that  2()  per 
cent  of  the  reveni.e  was  obtained  from  parcels  of  1 1 
pounds  and  under.  In  the  Express  Investigation, 
it  was  shown  that  for  a  given  month  in  1907  the  aver- 
age weight  of  packages  shipped  into  Toronto  was  19 
pounds,  while  in  the  case  of  outward  shipments  it  was 
43  pounds.  For  the  years  1918.  1914  and  1915  the 
average  weights  per  package  were,  in  the  case  of  the 
Dominion  Express  Company.  33.39,  3.5.86  and  36.27 
pounds  respectively.     On  a  check  made  by  the  Do- 


EXPHKSS    SKHVICK 


.•JOl 


minion  Kxj)ress  C"()nii)any  in  \\)\H  the  avera-^v  \vei<rht 
of  all  sliij)nR"nt.s  was  (>2  pounds  while  the  avera'rt'  liaul 
was  .'J4(>  miles.  In  the  ease  of  sllij)llU'nt^  under  100 
pounds,  whieh  represented  84  p^r  edit  of  the  total 
shipments  the  average  wei«»ht  was  "7  i<ounds  and 
the  average  haul  was  .*J78  miles. 

The  rates  for  j)aeka^'es  under  100  pound>  are 
worked  out  from  a  tahle  of  ^rnidnated  <har«»es.  one 
seetion  of  whieh  is  set  out  in  the  elassifieation. 

If,  for  example,  it  is  desired  to  ship  a  tirst-elass 
shipment  of  1.)  pounds  a  <listajiee  of  .'{.>0  miles  in 
Eastern  Canada,  the  a^^ent.  from  his  tal)le  of  dis- 
tanees,  will  aseertain  the  standard  rate  on  a  hundred 
pound  shipment  for  the  distanee  in  (piestion.  He 
finds  it  to  he  $2.00,  and  he  must  now  aseertain  how 
mueh  of  the  rate  is  applieahle  to  a  shii)ment  of  1.' 
pounds.  Then  he  will  look  down  that  eolunm  until 
at  the  left  hand  side  of  the  pa^re  he  finds  the  1.5  pound 
line;  where  this  line  intersects  the  $2.00  column  the 
jiroper  rate,  viz..  ,5.5  cents,  will  he  found 

20.  Kates  not  uniform. — Scrutiny  of  the  ^rniduate 
tahle  will  show  that  the  rates  are  not  huilt  up  on  a 
scientific  hasis.  The  effect  of  the  100  pound  rate  is 
not  carried  down  uniformly  thru  the  cohnnns  of 
rates.  For  example,  under  the  $1  merchandise  rate, 
the  charge  for  00  pounds  is  70  cents;  40  pounds,  m 
cents;  20  ])ounds.  4.5  cents:  10  pounds.  .'J.5  cents.  It 
is  urged  hy  the  express  r'ompnnies  that  the  expenses 
in  connection  with  colLcting.  deliverinfr.  liandling  and 


^1 


1  Sof  sppcinion  on  tlu-  foUowiiifr  pafro. 


XV 


-i\ 


r/i 

I 

Ss2^,  13    S'ri;2i2s    Si^p.'rf;;? 

fe 

U^ 

2i  '    SS^^iS    ^SS!S^^    S9999 

.      'L 

=  =  5i3^       i;?^i21?l^       ^':5^;5i:? 

"tri 

cS^^nco      cocococort      rt^^^^ 

cs 

2 

§ 

S  S  ?.  ^  ~5       «  «  «  n  n       i4  «  rf  K  ~ 

2 

o 

3i       SS^S^     m^^^^     ^^$9S 

'% 

-3    S 

55S2l5^       i?^i?^^       ^^21:5^3^: 

"as 

1=1 

_  i 

rac^co^co       cococococo       cococo^^ 

% 

-)>^ 

=  l?55i:?     i4i?^i?;5     i?^^i:5i2 

3i          SiS^^^      ^^^^^      ^m^mS 

Q5^ 

*!i 

^      ^      ^      ^      ^                 I**      1^      l*^      1-^      t"^                l«s      1^     i^      |«^      ••, 

i> 

•t.   Ti, 

SSSSS     iS^^SS^     ^iSiSiSiS 

CO  CQ   CQ  CO  CO           CO   CO  CO   CO   C^           CO   CO  CO  CO   CO 

e 

11          iS5§g^      ^'^'^ '■?.•?.       ^^^^^ 

rC 

r 

CO  CO  CO  CO  CO          CO  CO  CO  CO  €0          CO  CO  CO  CO  CO 

2 

■|J        -!^Sr=^^     ^^.'^'^'^     '■^'^'^.•^'^ 

t. 

■r.   :; 

SSSSS      SiSiiSS^      S^i?^!S 

fococococo        cococoeooo        COCOCICOCO 

0^ 

2 

s  =  s§^s§     %?,%'a'a,     ^^^^^ 

o 

CO  ^  CO  A  CO          CO  CO  CO  CO  CO          CO  CO  CO  CO  CO 

=  a 

5  =  =  ^S§       s255^      ^^^^^ 

—  r-:           p5c5c5o5cq       cococococo       wcocococo 

^ 

|il    assss     ag52g     ss;;?;;?^ 

«; 

OMcococo       eococoeoeo       e^eowcoco 

1  ■?  !  M  t 

tH         ^  iN  ^  f^  tH 

302 


.c.i  -vj.iU:...  lyi^jj 


55^^^!^^* 


i3a§?i? 

^  .=?  5? ;;?  :2  % 

5  13  R  .=  13 :: 

^sstss 

Sggg^g 

338^^8 

'^.9.^^^ 

•'^      •*       w       *       »•      1^ 

f  'f  *-  i.':  t!^  >i 

^!9ss:g 

SiSigg?^ 

SSSSS^ 

^^i^$5 

•^  •*  "^  t"^  <~  !•; 

:2  i  2  Q  :i  = 

$^sss 

iSSSiS^g 

^SSSSS 

^      u      o^ 


9!$^SS    sssssg    g^^sss 


ri  H  «  rf  J?       ^  ^  ^  ^  ^  ,"s       J"  •'-I'?  12  -3  2 


S^!$SS    ISiSSS^.^    ^g^^ss 


■3  '"5  '■:  tri       CSC  '■:  .- 
n  n  n  n       ^^^^^ 


ai^^!$S     SSSSSS     iSSgg^S 


o  "?  '■^  "^  lii        o  c  c  c  c  '•;        1-  i«  -»  —  —  ,^ 
«  r:  r:  t:  rs        ~;  ^  ^  ^  ^  ^        ^  ^  .-^  .-s  .-s  ,.; 


999^^     SSSiSISS     SSiSS^^ 


*T   J-;    .-;    1^    i<^  .^    ,^    ,-;    ^    ^    *  ^    ,^    J.    ^^    ^^    ^ 

c^t^c^c^?^         c^t^T^-t**-*         ^-f.^^^,':; 


^s§9§    :3sss;s:§    ssssss     i 


1-^   1^   tri 


SSSS^         lOIOiOQQQ         lOiOiaiOQO 


o   '"^   ''^   »^   »■?• 


!5!5SSS      QtoioioioQ      ooo^oiao  r 

eoeo<q<'q<^        ^^^^^2       touStoioioio       i-r- 


1^   O    '"^    t"^    t*^  »^    t^   fi    1^    1^   )^  »^    1^    (-^    »^    i*^    c 

loiaioioo       ooooioio       toioioooo 

PSWWCO'l"         «i<-'#-*Tj»Tj<'^         •<i*'3fxl*2io2 


e  «i  c  •t  c      «5  o  "*i  c  »!;  ©     ic  s  »o  p  i.-;  o 
NWrcrct      tt-ic;scr»      i^xacSssiS 


r^    i 


c 
o 


s 
c. 


®  I 


303 


f| 


:u)i 


INLAND     l.iAFFir 


f(tr  c'U'iical  work  nrc  practically  tlic  same  on  the  small 
sliipmciit  as  on  the  lar^c  shipment.  Further,  the 
100  pound  shipments  are  normally  made  hy  firms 
which  will  supply  the  express  wa^on  with  a  laroe 
amount  of  such  shipments  on  one  wa^nm-trip:  thus 
the  wa^on  mileage  necessary  is  accordingly  cut  down. 
There  is  eonsiderahle  force  in  this  contention.  At 
the  same  time,  in  view  of  what  has  heen  said  as  to 
average  si/e  of  shij)ment.  the  |)ressure  of  the  j^railuate 
tahle  on  the  rates   for  the  smaller-si/ed   j)acka^r(.   is 

apparent. 

In  the  e\|)ress  in\ estimation,  it  was  found  that  (»nly 
some  twenty-nine  rate  columns  were  ^iven  in  the 
graduate  tahle  an<l  that  when  the  rate  hetween  any 
two  ,  'iits  was  not  given  the  next  higher  rate  was  to 
he  usv(i  in  arriving  at  the  rate  on  the  p.  rticular  pack- 
age. AVhen  there  was  a  eonsiderahle  gap  hetween 
rates,  this  condition  meant  a  very  eonsiderahle  added 
rate  hurden.  and  so  direction  was  given  that  graduates 
had  to  he  added  under  all  the  100  pound  merchant., 
rates.  As  a  result  of  the  Board's  Judgment  of  1910. 
])rovisi()n  is  made  for  graduates  under  nuiltiples  of 
five  cents. 

21.  Sinf/lc  thru  rates.— In  the  matter  of  thru  rates 
on  packages  moving  over  two  lines,  and  suhject  to  th:' 
rates  of  the  graduate  tahle,  the  practice  liad  heen  to 
graduate  once  on  each  of  the  local  rates.  By  an  order 
issued  in  Noveni])er.  1911.  the  ex[)ress  companies  were 
directed  to  apply  a  "single"  graduate.  The  effect  of 
tliis  requirement  is  as  follows:  suppose  a  ten-pound 


EXPRESS  si:uvi(  i: 


.'JO.  J 


shipimiit  is  moviii^r  ,,n  a  thru  iin»vcnuiit.  tlu-  locals 
for  whii'li  oil  the  iiu  rfhaiwhst'  rate  an-  Si  and  Sl..)0 
irspt'ctivt'ly  (iraduatin^r  on  cacli  lotal  rate  there 
would  he  a  ehar^rc  of  ;j.-,  (H-uts  and  ;.">  eciits.  or  HO 
cents.  With  the  single  ^rmduate  on  the  s_>..-,()  ,;,te. 
the  char^ri.  is  .50  cents.  When  the  -rraduate  was  made 
on  the  sum  of  the  locals,  there  really  was  included  in 
the  rale  char^rts  a  payment  for  four  terminal  ser\  ie<  s. 
instead  of  two  as  at  present. 

The  effect  of  the  reduction  in  western  rates,  already 
referred  to,  wherehy  a  reduction  of  -JO  percent  in  tin- 
stainlard  rates  was  directed.  afVecled  not  oidy  the  mer- 
chandise rates  and  the  special  scale  for  shipments  of 
.500  |)oun(ls.  hut  also  the  (juantitits  of  less  than  100 
pounds  movin^r  under  the  merchandise  rale  an«l  scahs 
K  and  M. 


KKMKW 

Ulial  is  tlu'  (liffcrciicc  Ix-tw.-ni  tlir  ^<-v\'\ii-  ,,\'  .-xpro,  ,uin. 
IKiiiics  and  tliat  (if  ordinary  Ircitiht  <arri»r>;'  Kxplaiii  Ik.w  tin- 
fxprcss  ayciit    is   said   f<>  ad   as   IIm-   ■■(•u^toincr"-  ai;.iil."" 

Wliaf  was  llic  <lafc.  [\w  iialiin-  and  tlic  .•\t.-iit  of  [\u-  iMuinriin-i 
of  the  mod. Til  cxpn  ss  s<-r\  ic':-  W  lien  \\(i<-  I  lie  prcMut  ureal 
«'X|)rcss  coiiiiiaiiics  founded.  Ixitli  in  tlie  Inih-d  Stale-  and  in 
Canada? 

\Mial  pereentayc  of  the  yross  earninns  .,f  Hie  e\pre»  <-oni- 
panies  is  j.aid  l(.  tlie  railways:-'  What  riiusl  the  Dominion  Kx- 
press  ("oiu|»any  charsje  per   hundred   j)ounds' 

Deserihe  the  nature  of  n-lations  hefweeii  an  e\pre»  eonipanv 
and  tlie  railways,  (iive  some  of  tlie  pro\i-ioiis  of  an  aiireenieiit 
lietween   them. 

Into  what  two  I. road  classes  »rc  .-xpress  shipments  divided; 
what   sub-classes-'     What    is   the   l>a<is  of   the  clas-ifieation:-' 

AMiat  are  the  express  compan\"s  limilalions  as  to  liability? 
Is  it  liable  for  the  negligence  of  the  railwav? 


:)()(> 


INLAND    TUAFFIC 


What  arc  hie  stauilanl  iiiilraKr  tarilTx;  local  ami  lraii>f«'r  tar- 
iffs?     Ilow    arr  tlity   Imill    u[>f 

Wliat  arc  coiiiiiKMlitv  ratc^.?  Wlial  i-.  Ilic  graduate  talilc? 
Iliiw  arc  rales  fi\cil  on  packaii'-^  of  |c».  than  one  hiinilrcil 
IM>uinlsi'      \\  iiat   coiniwlitivc  conditions  alliccl  ••xprc-s   rates? 


^■■P 


I 


CIIAPTKH   Win 


IM.AM)  WATKll  THANSI'OiriAI'lON 

1     Water  frdnsjiortation  as  ti  rctjn'.itlor  of  rafts. — 
111  (Ic-.'iliii^-  with  the  factors  aflVctiiiu-  railway   ratts. 
various  e\amj)Ies  have  ahvady  htm  «»i\tM  of  \\\v  iiithi- 
cuce  exercised  hy  water  carriers  on  rail  iiiov  eiiicnts. 
In  general,  when  thire  is  coiiipetitioii  hetwi.n  these 
two  methods  of  transportation,  thi  rail  rate  can  exceed 
the  water  rate  only  to  the  extent  that  it  yives  superior 
facilities.      The  following-  are  characteristic  disadvan- 
tages of   water  transportation:   marine   insurance — 
the  rail  carrier  is  an  insurer:  liahility  to  salt   water 
damage;    longer    time    in    transit,    and    consc(|uent 
greater  interest  on  capital   invested:   uncertainty   in 
date  of  arrival,  etc.      W'e  should  consider,  also,  the 
general  convenience  that  the  n.ilway  affords,  which  is 
estimated  as  worth  a  premium  of  at  least  five  per  cent 
over  water  rates. 

The  efHciency  of  water  competition  on  ifiland  waters 
is  affected  hy  the  locatioTi  of  cities  and  towns.  Where 
these  are  adjacent  to  the  water,  the  com|)etitive  effects 
are  more  readily  felt.  Ihit  even  in  the  case  of  points 
some  distance  inland,  for  example,  thruout  the  west- 
ern j)eninsula  of  Ojita.rio,  the  effect  of  the  water  route 
is  felt.     To  cite  ii  particular  example,  on  the  all-rail 

;!07 


308 


INLAND  TRAFFIC 


movement  of  coal  to  I^tmdoii  there  is  the  competitive 
effect  of  the  across-the-hike  movement  to  Port  Stan- 
lev  an<l  tlience  to  London. 

2.  Efficicncj)  of  icatcncai/s. — Inhuul  waterways 
(hffer  in  point  oF  efficiency.  The  hikes  and  navi«»ahle 
waters  are  puhhc  highways  accessible  to  all.  Canals 
recpiire  hn-ger  investments  of  capital,  hnt  are  still  com- 
mon highways,  on  which  the  individual  may  use  his 
own  vessel.  The  practice  in  Canada,  as  now  acceptetl, 
is  to  have  canal  construction  carried  on  at  i)ul)lic  ex- 
pense at  a  charge  against  the  taxing  power  of  the 
country.  Canals  on  a  route  aid  in  detennining  the 
maxinuim  efficiency  of  that  route.  The  same  thing 
is  true  in  the  case  of  dredging,  as  in  the  St.  Mary's 
River  and  thru  the  St.  Clair  flats.  Just  as  the  gov- 
erning grade  of  a  railway,  in  a  division,  determines  in 
practice  the  hauling  efliciency  of  an  engine  (no  matter 
what  niav  he  its  maximum  tractive  efliciencv)  thru  tlie 
division,  thereby  affecting  the  costs  of  haulage,  so  it 
is  the  shallowest  ])art  of  a  water  route  that  governs 
the  loading  efficiency  of  the  route. 

3.  Canal  terminals. — In  the  development  of  canals 
independent  of  great  waterway  systems  an  exceed- 
ingly important  matter  is  the  location  of  the  terminals 
in  the  various  towns  and  cities  they  serve.  One 
disadvantage  the  English  combined  canal  and  water- 
ways systems  have  is  that  their  terminals  are  so 
located  in  large  cities  that  it  is  cheaper  to  haul  by 
rail  direct  to  destination,  as  well  as  more  convenient, 
than  to  pay  the  water  charge  and  the  wagon  haul  thru 


vm 


mmmmmmtm^m 


m&mim 


INLAND  WATER  TRANSPOUTATIOX 


309 


the  city  to  destination.  In  the  cities,  businesses  en- 
gaged in  distribution  grow  up  adjacent  to  tlie  railway 
terminals,  and  in  nianv  cases  have  railway  sidinys 
where  delivery  is  taken.  If  it  costs  2.)  cents  a  ton  to 
haul  coal  by  wagon  from  the  canal  terminal  to  the  coal 
yard,  this  charge,  if  the  canal  toll  is  li  mills  per  ton 
per  mile,  is  etpiivalent  to  the  cost  of  haiding  the  coal 
Hli  miles  on  the  canal. 

4.  Obligations  of  vessel  carriers. — The  liability  of 
railways  has  been  defined  and  extended.  In  the  case 
of  vessel  carriers,  the  obligations  at  common  law  in  tl:c 
absence  of  express  contract  are  dcHned  as  follows  by 
Carver,  in  his  treatise  on  the  "l-.aw  relating  to  Car- 
riage of  goods  at  Sea": 


(1)  To  carry  and  (iclivcr  the  ^oods  in  sidVtv,  uiiMvtrin^ 
for  ail  loss  or  dfiiiiii^o  which  nuiy  happtii  to  thtiii  wliilc  tln'V 
a  10  in  his  hands  as  a  carrier, 

(Ji)  l.'^nlcss  caused  by  some  Act  of  (iod,  or  ot"  tlie  Kind's 
enemies,  or  by  some  detect  or  infirmity  ot  the  ^ood^  them- 
selves or  their  packages,  or  thru  a  voluntary  >acritict'  for 
the  ffeneral  safety  :  and 

(.'J)  That  these  exceptions  aie  not  to  excust'  him  if  lie 
has  not  been  reasonably  careful  to  avoid  or  <>iiard  n^auist 
the  cause  of  loss  or  dama<ife ;  or  has  met  with  it  after  a  di- 
])arture  from  the  proper  couise  of  the  voyaf^c:  or  if  tlu'  loss 
or  damage  has  been  due  to  some  unfitmss  of  the  ship  to  re- 
ceive the  car^o,  which  existed  when  he  connnenced  the  voyage. 

.).  Sioj)e  of  stdtutorif  provisions  on  rcater  carriage. 
— The  stalut(»ry  provisions  i-ontvming  water  carriage 
of  goods  are  contained  in  the  Dominion  legislation  of 
11)10,  which  applies  to  the  water  carriage  of  goods 


in 


I 


m^imm 


'^nWTTtF. 


.«\J^H  1K 


310 


INLAND  TRAFFIC 


from  one  port  in  Canada  to  any  other  port  in  Canada, 
or  from  any  port  in  Canada  to  any  port  outside  of 
Canada. 

().  Exemptions  prohibited  in  hill  of  lading. — Pro- 
visions in  a  hill  of  lading  exempting  from  liahility  fin- 
loss  or  damage  to  goods  arising  from  negleet,  iaek  of 
proper  loading,  stowage,  eustody,  eare  or  delivery,  are 
jiroliihited.  So,  also,  is  any  limitation  of  the  ohliga- 
tion  of  the  owner  or  eharterer  of  a  ship  to  exercise  due 
diligence  to  man,  equip  and  supply  the  ship  properly, 
and  m^ke  and  keep  it  seaworthy,  and  make  and  keep 
the  hold  and  other  portions  thereof  fit  and  safe  for  the 
reception,  carriage,  and  preservation  of  goods. 

7.  Due  diligence. — When  the  owner  of  a  ship  exer- 
cises due  diligence  to  see  that  it  is  in  all  respects  sea- 
worthy and  properly  manned,  equipped  and  supplied, 
neither  the  owner,  agent  nor  charterer  is  responsible 
for  loss  or  damage  resulting  from  faidts  or  errors  in 
navigation,  or  in  the  management  of  the  ship,  or  from 
latent  defect. 

8.  Limited  li(d)ilit//. — IJahility  is  limited  to  $100  a 
package,  unless  a  higher  value  is  stated  in  the  bill  of 
lading  or  other  shipping  documents.  The  company  is 
not  liable  for  loss  or  damage  if  the  nature  or  value  of 
the  goods  has  been  falsely  stated  by  the  shipper,  unless 
such  false  statement  has  been  made  by  inadvertence 
or  error.  The  declaration  by  the  shipper  in  regard  to 
the  nature  and  value  is  not  conclusive  evidence  against 
the  owner,  charterer,  master  or  agent  of  the  vessel. 

9.  Contents  of  bill  of  lading. — Every  owner,  char- 


^wpw" 


«■ 


P^ 


INLAND  WATER  TRANSPORTATION       311 


terer,  master,  or  agent  of  any  ship  carryiiio-  goods  is, 
on  demand,  to  issue  to  the  sliipper  a  hill  of  lading 
showing,  among  other  things,  the  marks  necessary  for 
identification,  as  furnished  in  writing  i)y  the  shipper, 
the  immher  of  packages  or  pieces,  the  (piantity  or 
weight,  and  the  apparent  order  and  condition  of  the 
goods  as  1  -red  to  or  received  h\  ach  owner, 
charterer,  nu  or  agent.     Such  hill  of  lading  is  to 

be  prima  facie  evidence  of  the  receipt  of  the  goods  as 
therein  described. 

10.  DaugcTous  .shipments  must  he  declared. — A 
shipment  of  goods  of  inflammable  or  explosive  nature, 
or  of  a  dangerous  nature,  \rthout  full  declaration  in 
writing  of  the  nature  of  the  shipment  and  the  receipt 
of  permission  from  the  agent,  master  or  person  in 
charge  of  the  ship,  is  subject  to  a  fine  of  {J^l.OOO. 

11.  Railtvaf/  hill  used  on  Lah'cs.—'Vhv  hV\  of  lading 
covering  package  freight  movements  on  the  Lakes, 
used  by  the  Canada  Steamship  Lines,  is  the  l^lilway 
Bill  as  approved  by  the  J^)ard  in  1920. 

12.  Provisions  of  r/rain  hills  of  lading.— The  grain 
bill  of  lading  issued  by  the  Canadian  Pacific  Steam- 
ship Company  for  lake  movement,  exempts  the  com- 
pany from  loss  or  damage  caused  by  the  dangers  of 
navigation,  by  any  delay,  or  by  fire,  heating,  acci- 
dents, storms,  weather,  an  act  of  God,  etc.,  or  from 
deficiency  in  weii»ht. 

It  is  further  provided  that  the  company  is  not  liable 
for  loss  or  damage  occurring  in  any  other  maruier 
without  negligence  on  the  company's  part.     Claims 


i'H 


wmmmmmm 


S^I^WP 


312 


INLAND  TRAFFIC 


Wmi 


for  loss  or  damage  are  to  be  made  in  writing  within 
twentv-four  lioiirs  after  delivery  or  arrival  at  ter- 
minal  point.  Under  the  Kail  15ulk-(irain  liill,  a 
period  of  four  months  after  delivery,  or  in  ease  of 
failure  to  make  delivery,  then  within  four  months  after 
a  reasonable  time  to  make  delivery,  is  allowed. 

I'^nder  the  Lake-(irain  Bill,  the  loss  or  damage  for 
which  the  company  is  to  be  responsible  is  to  be  com- 
puted on  the  value  or  the  cost  of  the  grain  at  the  ])lace 
and  time  of  shipment.  It  appears  that  it  holds  itself 
liable  only  if  there  is  negligence.  In  the  case  of  the 
Rail  Bulk-(irain  Bill,  there  are  added  to  the  compu- 
tation of  value  for  settlement  the  freight  charges,  if 
paid,  or  the  duty,  if  paid,  or  ])ayable  and  not  re- 
funded; and  it  is  provided  that  this  rule  shall  apply 
whether  the  loss  or  damage  occurs  from  negligence 
or  not. 

13.  General  liens'. — lender  the  lake  bill,  the  com- 
pany has  a  general  lien  not  only  for  the  back  charges, 
carriage,  storage,  Avharfage.  demurrage,  etc.,  attach- 
ing to  the  property  specifically  concerned,  but  also 
for  any  general  balance  that  may  be  due  the  company 
from  the  consignor  or  the  consignee  of  such  property, 
and  all  charges  must  be  paid  before  the  property  is 
delivered,  lender  the  Railway  Act,  the  right  to  seize 
is  limited  to  the  tolls  due  on  tlie  specific  goods  seized. 

14.  IVliat  constitute.s  eomplete  deliverf/. — Accord- 
ing to  the  Lake  Bill,  when  the  company  receives  goods 
consigned  beyond  the  places  at  which  the  company  has 
stations,  it  is  to  be  regarded  as  makirj  complete  de- 


iPa^Pi^P^P 


■W^W^W" 


■m>i«>Pli«P 


INLAND  WATER  TRANSPORTATION        31fJ 


livery  by  giving  notice  to  a  puljlie  carrier  that  the 
company  is  i)repare(l  t??  deliver  the  sliij)ineiit  for 
further  conveyance.  And  the  company  is  not  to  he 
responsible  for  any  loss,  misdelivery,  damage  or  de- 
tention of  property  carried  by  it,  if  such  loss,  etc., 
shall  occur  after  such  projjcrty  shall  have  arrived  at 
the  station  or  [)lace  on  the  conjoany's  line  nearest 
to  the  j)lace  to  which  it  was  consigned.  The  Kail 
liulk-Cirain  Bill  has  the  same  provision  in  regard  to 
movements  under  a  joint  tariff'  as  is  set  out  m  Section 
Jj,  Chapter  XV. 

1.5.  Canadian  lake  and  canal  route -~Vvnu]  the 
head  of  Lake  Superior  to  Montreal  the  distance  by 
the  water  route  is  1,2U  nnles.  From  Duhith  atul 
Chicago  to  the  same  point  the  water  distances  are 
1,33(»  and  1.240  miles,  respectively.  Of  the  dis- 
tance between  Port  Arthur  and  Montreal,  the  canals 
to  be  traversed  represent  79  miles,  i.e.,  lockages  are 
involved  in  six  per  cent  of  the  total  route. 

The  Canadian  "Soo"  C\'uial  has  a  lock  \HH)  feet  in 
length  and  19  feet  .5  inches  in  depth.  The  vessels 
passing  thru  it  can  move,  without  breaking  bulk, 
to  the  foot  of  Lake  Erie.  Last  thi-u  the  AVellaTid 
Canal  and  the  St.  Ivawrence  Canals  to  Montreal,  the 
governing  locks  are  270  feet  in  leng-th  and  U  feet  in 
depth. 

This  canal  dcternnnes  the  cargo  load  and  type  of 
vessel  using  the  lower  portion  of  the  route,  and  differ- 
entiates the  type  of  vessel  in  use  on  it  from  that  used 
between  Lakes  Superior  and  Erie.     In  general,  on 


i'i 


3U 


INLAND  TRAFFIC 


the  lower  portion  of  the  route,  a  vessel  2.)5  feet  in 
length,  42  feet  (>  inches  wide,  drawing  13  feet  and 
carrying  2,212  tons  of  cargo  may  he  regarded  as  typi- 
cal of  the  ordinary  vessel  on  this  portion  of  the  route. 

16.  The  Wclland  Canal— \n  order  to  meet  the 
rapid  expansion  of  water-horne  traffic  and  the  in- 
creasing size  of  vessels  plying  on  the  Great  Lakes  it 
has  heen  necessary  many  times  to  eidarge  and  recon- 
struct the  canal  systems  of  Canada.  Shipping  has 
always  exceeded  canal  capacity  so  that  the  Wetland 
Canal,  coimecting  Lake  Erie  with  Lake  Ontario,  has 
never  heen  ahle  to  acconmiodate  the  larger  vessels  on 
the  I^akes. 

The  first  Wetland  Canal,  built  with  private  capital, 
was  begun  in  1824  and  completed  in  1833.  In  1841 
the  Government  of  Upper  Canada  purchased  the 
Canal  and  passed  an  appropriation  for  its  enlarge- 
ment. Within  twentv-five  vears  time  the  demands 
of  navigation  again  made  necessary  the  further  en- 
largement of  the  Canal  by  the  Dominion  govern- 
ment. A  new  location  was  chosen  which  offered  a 
straighter  chaimel,  reducing  the  length  of  the  Canal 
from  27lii  to  26'>4  miles.  It  extended  from  the  Lake 
Ontario  entrance  at  Port  Dalhousie  southward  to 
Allanburg,  about  half  the  distance  i)etwcen  the  lakes. 
The  Canal  was  deepened  to  12  feet,  then  to  14  feet 
and  equipped  with  larger  locks. 

The  Wetland  Ship  Canal  which  is  now  under  con- 
struction takes  a  straighter  course  than  the  present 
canal  and  shortens  the  length  of  the  route  to  25  miles. 


INLAND  WATER  TRANSI»OUTA  TION 


.'{15 


It  is  hein^  huilt  on  a  new  location  for  the  12  mile 
(listiuiee  from  Lake  Ontario  to  Allanhur^  and  from 
there  to  Lake  Erie  it  very  generally  fcjllows  the 
eoin-se  of  the  ohl  eanal.  The  Shij)  Canal  will  enter 
Lake  Ontario  about  8  miles  to  the  eastward  of  Port 
Dalhonsie,  the  present  entrance,  at  a  place  named 
Port  ^^'"eller.  Ik'tween  Allanhur^,  the  junction  of 
the  present  and  old  Welland  Canals,  and  Port  Koh- 
inson  the  Canal  will  he  deepened  afid  widened.  From 
Port  Robinson  the  Canal  will  follow  the  Welland 
River  to  the  town  of  AVelland  where  the  present 
canal  will  be  entered  and  except  where  a  curve  is 
eliminated,  followed  thru  to  Port  Colhurne  on  Lake 
P^rie. 

The  new  ship  eanal  will  greatly  shorten  the  time 
of  operation.  When  the  ship  canal  has  been  com- 
pleted a  vessel  will  be  passed  thru  in  8  hours  instead 
of  15  to  18  hours  as  formerly.  In  heavy  traffic  it 
will  be  possible  to  pass  several  vessels  thru  the  locks 
at  once. 

The  Canal  when  c()m])leted  will  be  '25  miles  long 
with  7  locks  800  feet  long.  80  feet  wide  atid  from  2.5 
to  30  feet  deep.  The  estimated  cost  of  the  Canal, 
according  to  pre-\  ir  tigurcs  is  $.50,000,000.  Work 
on  it  was  suspended  from  .Tanuary  1017  to  the  cessa- 
tion of  hostilities.  Upwards  of  .$:J0,000,000  have  been 
spent. 

17.  Trafjic  on  the  WcUand  Canal.— The  Welland 
Canal  is  in  operation  about  eight  nuMillis  in  the  year, 
from   April   until   December.      In    1023   over   4,700 


:n(> 


INLAND  TRAFFIC 


i 


vessels  passed  thru  the  Canal,  a  larger  miniher  tlian 
at  any  time  previous  to  11)1. 'i.  In  lt)2.'i  a  total  of 
.■i.7o.">,in2  tons  was  eairied  thru  the  Canal,  of  whieh 
amount  1 ,4'J.'t.()().'t  tons,  or  .'J8  per  eent.  was  iVmeriean 
freight. 

18.  Ottdxca  st/sfi'iii. — The  eanals  of  the  Ottawa 
system  with  loeks  200  feet  lon^  and  0  feet  in  depth, 
are  of  limited  importanee.  On  the  liideau  Canal 
system,  the  loeks  are  \IU  feet  lon^  and  .5  feet  deep; 
while  on  the  Uiehelieu  systein  they  are  200  feet  in 
length  and  7  feet  deep.  The  Trent  Canal,  whieh 
is  intended  to  eornieet  Georgian  Bay  and  the  eastern 
end  of  Lake  Ontario,  affords  a  tortuous  water  route 
six  times  as  long  as  the  direet  land  route.  The  gov- 
erning depth  is  five  feet.  The  route  is  heing  eon- 
structed  for  the  use  of  harges  and  is  now  in  operation 
between  Trenton  and  AVashago.  at  the  head  of  I^ake 
Couehiching.  A  total  of  800  miles  of  eanal  and 
eanalized  waters  is  now  heing  operated. 

19.  No  canal  tolls. —  From  an  early  date  the  con- 
struetion  of  improved  transportation  ways  in  Canada, 
both  water  and  rail,  has  looked  to  partiei])ation  in 
the  trade  of  the  western  states  adjoining  the  (ireat 
Lakes.  Sinee  190.*}  tolls  have  not  been  eharged. 
The  advantage  of  inereased  traffie,  as  reaeting  on  the 
general  business  of  Canada,  is  ex])eeted  to  compen- 
sate for  this  additional  charge  on  the  general  revenue 
of  the  country.  Thruout,  the  aids  to  navigation  and 
the  deepening  of  harbors  are  charged  against  the  gen- 
eral revenues  of  the  country. 


INLAND  WATKH    rHANSPOKTATlON 


•n 


20.  Girui  Lah'CH  traljic.  \  tiviiiiiKioiis  vdlunu"  of 
freight  and  vessel  tc)n!ia«'e  has  developed  on  the  (ireat 
Lakes.  Without  eompaiin^^  vahies,  it  may  i»e  said 
that  in  seven  and  a  halt*  months  of  tlie  year  there 
passes  thru  the  two  eanals  at  .Saiilt  Ste.  Marie 
tliree  times  the  vessel  tonna^n*  that  oiks  thru  the  Suez 
Canal  in  a  year.  When  to  this  there  is  a(lde<l  the  ves- 
sel tonnage  hetween  Lakes  Huron  aFid  Miehi<,^in  on 
the  one  hand,  and  Krie  on  the  other,  the  result  may 
he  measured  hy  the  statement  that  durin^r  the  season 
of  navigation  a  vessel  passes  Detroit  every  six  miji- 
utes.  The  numher  of  vessels  passin«r  Detroit  is  ten 
times  greater  than  the  numhei-  passino'  tiuii  the 
Suez  Canal.  The  freight  tonna<ie  passing  Detroit 
is  greater  than  the  aggregate  of  all  the  cargoes  home 
by  all  the  ships,  British  and  foreign,  entering  the 
ports  of  Great  Britain  in  a  year. 

2L  Trajfic  on  the  Upper  Lakes.  Of  the  traffie  on 
Canada's  inland  waters,  that  of  the  I'pper  Lakes  is 
the  most  important.  In  11)12  tlie  movement  thru 
the  Welland  and  St.  Lawrenee  Canals  represented, 
respectively,  seven  per  cent  and  six  per  cent  of  the 
total  movement  thru  the  Canadian  eanals:  the 
movement  thru  the  Canadian  "Soo  "  C  anal  was  8:} 
per  eent  of  the  total.  A  radical  change  followed  the 
opening  in  11)1 4  of  a  new  and  larger  lock  on  the 
Fnited  States  side  of  the  St.  Mary's  Iliver.  In  102:}, 
89,120,902  tons  of  freight  went  thru  the  Tnited  . 
States  eanal  as  compared  with  2, 2.5.), 929  tons  thru  the 
Canadian  "Soo"  Canal.  The  large  ships  used  the 
American    eanal.      Of    Canada's    total    canal-borne 

XV 


!i 


i    > 


C—J. 


jm 


318 


INLAND  TRAFFIC 


freight  traffic  in  1923  ( 1 1,191),4:J4  tons),  the  Welland 
Canal  car  ied  33..)  ])er  cefit;  tlie  St.  Lawrence  Canals, 
4().()  per  cent;  and  the  "Soo"  Canal,  20.1  per  cent. 
Of  the  total  capital  expenditnre  on  canals  in  Can- 
ada, ahont  two-thirds  have  l)een  on  the  "Soo,"  Wel- 
land  and  St.  I^awrence  Canals.  Between  1018  and 
1023,  the  freight  traffic  passing  thru  the  Canadian 
"Soo"  Canal  decreased  by  51  per  cent.  In  the  same 
period,  the  traffic  passing  thru  nil  Canadian  canals 
decreased  hy  41  per  cent.  Of  the  decrease,  80  per 
cent  was  attril)utal)le  .o  the  "Soo"  Canal.  As  has 
been  indicated,  a  deflection  of  traffic  to  the  American 
"Son"  canals  decreased  the  total.  The  total  tonnage 
passing  thru  the  Canadian  canals  fell  from  .32.3  mil- 
lions in  1013  to  11.2  millions  in  1023.  With  this  gen- 
eral reduction  in  tonnage  the  percentage  proportion 
of  the  Canadian  "Soo"  Canal  has  been  reduced;  it 
now  has  20  per  cent,  while  the  Welland  and  the  St. 
Lawrence  Canals  have  respectively  34  per  cent  and 
41  per  cent. 

A  significant  fact  in  the  develop  .ent  of  lake  trans- 
portation has  been  the  increasin  importance  of  the 
tapper  Lakes.  The  great  increase  in  the  t"affic  pass- 
ing thru  the  "Soo"  canals  is  one  index  of  this. 
With  the  development  of  the  Ignited  States,  the  west- 
ward moveme  it  of  grain  centers  and  the  expansion  of 
popu^ntion  have  lessened  the  transportation  impor- 
tance possessed  by  the  I^ower  Lakes  in  the  early  days 
of  the  Canadian  canal  system.  In  the  United  States, 
the  center  of  wheat  production  has  moved  w^est  and 
north.     In  Canada,  the  more  recent  development  of 


Pipp 


■n 


MVP 


INLAND  WATKH  TUANSI'OH  I'A  TION         liV.) 

f'e  wheat  areas  of  tlie  Northwest  has  intensified  the 
si^nifieaiiee  of  this  northward  and  westward  pnil. 
The  ti'ansj)(»rtati()n  si^nifieanee  of  tliese  elian^es  is 
that  all  the  shortest  lines  of  eonuuiinieation  from  the 
Northwest  to  the  seaboard  lie  aeross  Canada. 

22.  Character  of  frrif/ lit. —in  the  K^-neral  trat!ie  of 
the  lakes,  iron  ore,  coal  and  ^rain  are  of  most  impor- 
tance. The  following  figures — for  a  fairly  active 
traffic  year — show  the  movement  hy  percentages  thru 
the  "Soo"  canals: 

KftstlMiiind  Wrsthiiimd 

Iron  ore   lO.'.H  .()(} 

Wheat    1H.4.') 

Grain,  otlar  than  wluat   ().4()  .01 

Flour    ;MS  .ooi 

Lumber 1.05  .0()()(} 

Merchandise  and   niiseelhincoiis 

freifrht     .'{J)  ;m)7 

Copper 01)  

Stone    07  -j.HH 

Piff  iron 001  .00.-) 

Manufactured  iron  and  shel    ....           .OOOO^  .-Jo 

Coal,  soft 77. i() 

Coal,  hard    l.'{.i)l 

Salt ..'}<) 

Oil 1.87 

The  distribution  of  traffic  by  percenta<res  for  the 
Canadian  "Soo"  Canal,  the  Wclland,  and  the  St. 
Lawrence  in  the  same  year  was  as  follows: 

Agricultural  Aiiiiii.il  Mannfac-  rr()(lncf>;  Pnuhicts 

products  products  (urcs  of  f,,nsf,  of  min<"s 

"Soo"'    Canal..    7I.!)J                 .05  |  .>.!)(;                   juo                 ]2.'iH 

\yehand  Canal  G0.91                 —  (i.(i(i                  5^03                27 AQ 
St.  Lawrence 

CauaLs    oO.SO                .13  7.92                  9.72                31.42 


P 


1; 


J"^  .^r^Z^_. 


320 


INLAND  THAiriC 


The  tr.'illic  handled  thru  the  Cjumdinn  e.inals,  ex- 
pressed i»!  pereeutu^es.  is  i^iven  in  the  follow  in^  tahle: 


.Xjjjricultiiral   \> 
Aniui.il   pr< 
Miiniif,    tti. 
Fort'st    ( 
Products 


i9ir.  iniT  i!)iH  1910  in.'o  loji 

p«T  i»'tit  pt  r  (Tilt  per  cent  per  ct  tit  p»r  <int  per «(  nt 

lis.    .'I.!t(i  ir._'l  ll.U  M.M  l.'_"il  .»>_»» 

.01            .(Hi  .r_'  .Hi            .l'{  It 

...     ;{..■.;»        ;{.(•".  4.2.>  H.j!»        xr,H  n.ai 

-.ST           .-..'.'(i  Mil.  H.TI  l_'.<>:l  7.HI 

.  .    (W.(iO  l:i.H-2  7y.2.>  .JU,!)H  a.i,;j.>  27.7!) 


HKVIKW 


'•'  s  itr    traiispDrtatioii    regulatt-    fruglit 

.'    tHiiiriKV    (tt    inland   watt-r  transpdrla- 


To    wli.V 
ratfs.' 
t  ion  } 

What    li    tiiMti*  .shipuwnt'rs    assunu-    for    t!u-    frti^ht    tlicv 

carry?      1'    «    r?c      ,;.     .iHerfiit   bills   of  lading  nuidify   tli<i'sf   lia- 
bililits.^ 

Wliat   tonnnodities   ci'iistitutt-   tlu-    Imlk   t»t    tlif    tratHc    on    tl»e 
Cireat    Lakis? 


CTIAPrKK  XIX 

C.n.WS  .VNI)  OTHKK    IKAI  I  l(    ON    Jill.  {-KI'.A'r  lAKF.S 

1.  Q/iistions  cotniichd  wifh  (/rain  I ra ffic.  WWh 
the  cxpaiidiii^  ^rjiiii  traffic  of  tlu  Xoillivvcst.  there 
arise  various  impoitaiit  tratHe  (jiiestions.  'I'here  is 
not  only  the  (jiiestion  of  what  propurtion  is  lake  home, 
hut  the  further  (juestiou  as  to  wiiat  routes  it  lakes. 
The  nature  of  the  movement  to  the  head  of  the  lakes 
with  its  eoneentratioii  of  a  larirt-  movement  in  a  rela- 
tively short  spacf  of  time  has  an  important  hearing 
not  only  on  the  transportation  s>  stem  hut  also  on  the 
fortunes  of  wheat-^rowin^.  'I'he  wheat  shipments  out 
of  Fort  William  and  l*ort  Arthur  in  the  months  of 
Oetoher  and  Xovemher  are  likely  to  e(|ual  the  total 
for  the  remainder  of  the  year.  ..As  is  pointed  out  in 
Mr.  Sanford  Evans"  interim  rep(Mt  on  the  (ieor^ian 
15ay  Canal,  the  method  of  marketing'  j^rain  in  West- 
ern Canada  is  "to  thrust  forward  sharply,  immedi- 
ately after  the  harvest,  the  greater  paii  o*'  the  surj)lus, 
reservin«»-  something  f.)r  a  see<tnd  lliiust  .ahout  the 
followinn-  >ray."  It  fui'ther  happens  that  the  heavy 
marketing'  of  wheat  from  Western  Canada  tends  to 
happen  at  periods  when  the  demand  of  the  I  iiite<l 
Kingdom   is   relatively   li^ht.      It.  therefore,   follows 

that  the  rushin<r  foi  ward  of  ^rain  which  is  necessi- 

3_'i 


322 


INLAND  TRAFFIC 


II 


tated  by  credit  conditions,  lack  of  farm  storage,  etc., 
breaks  tlie  price. 

2.  Capacitjj  of  elevators. — There  are  in  Ontario 
and  the  \V^estern  Provinces  »3,84.)  graiti  elevators  with 
a  total  capacity  of  21(5.8  million  bushels.  At  Port 
Arrhiu'  is  found  the  largest  grain  elevator  in  the 
world  with  a  capacity  of  9..>  million  bushels  and  at 
Fort  William  one  with  a  capacity  of  7.5  million  bush- 
els. In  Ontario  the  ])ublic  elevators  have  a  stor- 
age capacity  of  iiiiA  millions  and  at  M  ntreal  4  ele- 
vators have  a  combined  storage  capacity  of  9.0 
million  bushels.  In  all  Canada  there  are  about  3,900 
grain  elevators  with  a  combined  storage  capacity  of 
some  240  millions  of  bushels. 

3.  Method  of  doing  hnmness  under  Grain  Aet. — 
In  1912,  the  "Canada  Grain  Act"  took  the  place  of 
"The  ]Manitoba  Grain  >iVct,"  which  had  been  enacted 
in  1910  and  which  was  concerned  with  the  supervision 
of  the  grain  industry.  lender  the  Grjin  Act,  there 
are  three  methods  of  doing  business — merchant,  ware- 
houseman, and  factor  or  agent.  The  first  includes 
the  track  buyer  and  country  elevator  where  the  dealer 
exercises  his  function  in  buying  grain  outright;  the 
second,  the  terminal  elevator  and  the  country  elevator 
in  the  exercise  of  its  function  by  doing  a  storage  busi- 
ness only;  and  the  third  includes  all  commission  mer- 
chants, lender  the  law,  the  terminal  elevator  is  lim- 
ited to  the  liusiuess  of  a  warehouseman,  i.e.,  it  can- 
not deal  in  grain. 

4.  lAeenses  and  innpection. — The  public  function 


TRAFFIC  ON   TIIK  (JKKAT  LAKES 


.'323 


performed  hy  the  elevators  is  subject  to  a  Iiceiisiii«»- 
and  iiispeetion  system  under  the  Hoard  ot*  (iram  C"om- 
missioners,  a  body  of  tliree  men  apjxjinted  to  earry 
out  the  euforeement  of  the  (irain  Act.  Licrnst's  are 
subjeet  to  bonds  bein«^-  ^iven  to  eover  the  finaneial 
responsibilities  ineident  to  the  type  of  business  en- 
gaged in. 

5.  Causes  for  car  shortanc.—ln  the  handlin*^  of 
grain  lorward  from  l!ie  produeing  point,  the  initial 
relation  with  the  railway  begins  when  aj)plieation  is 
made  for  ears  and  the  entry  therefor  j)laee(l  ii>  the 
car  order  book.  DitHeulties  in  respeet  of  ear  short- 
ages may  arise  from  causes  for  whieh  the  railways 
are  responsible,  from  difheulties  for  whieh  shippers 
elsewhere  are  responsible  by  holding  ears  under  load, 
or  from  ditiieulties  attributable  to  the  volume  of  the 
crop. 

So  long  as  the  present  limited  storage  facilities  exist 
upon  the  farm— the  causes  for  this  being  in  many 
cases  the  linn"ted  finaneial  resources  of  the  farmer— 
wheat-farming  will  be  a  cause  of  constant  heart  burn- 
ings to  the  small  producer.  Mixed  farming  is  be- 
ing much  discussed  and  a  fair  start  has  been  made 
in  Alberta.  From  the  railway  standpoint,  one  ad- 
vantage of  mixed  farming  will  be  more  ecotiomical 
utilization  of  rolling  stock  and  a  steadier  and  a  more 
efficient  transportation  service,  since  there  will  be  a 
diffused  burden  instead  of  a  sharply  concentrated 
peak  load.* 

iThe  general   (iescripfion   jriven   is   siiiniiiariml   from    tlie   lecture.'    hy 


r  Fl 


f    si 

til 

r! 


immmvn 


32-t 


INLAND  TRAFFIC 


i 


6.  Documents  in  grain  shipments. — The  cars  are 
billed  forward  from  tlie  shipping  station  under  the 
bulk  grain  bill  of  hiding,  which  is  made  out  in  du])li- 
cate.  The  original  bill  when  receipted  by  the  railway 
becomes  the  commercial  bill  of  lading  which  is  used  in 
financing  against  the  grain.  The  duplicate  l)ill  is  the 
railway's  record.  The  face  of  the  bill  shows  the  ship- 
ping station,  to  whose  order,  to  what  station  and  ter- 
minal elevator  the  grain  is  shipped,  who  is  to  l)e  ad- 
vised of  its  inspection  and  its  outturn  on  unloading, 
the  kind  of  grain  and  the  approximate  (piantity.  The 
duplicate  bill  remains  at  the  shipping  statioti.  The 
local  station  agent  copies  out  the  instructions  from 
the  bill  of  lading  on  a  separate  paper  known  as  the 
"way-bill."  This  document  goes  forward  with  the 
shij)ment,  under  the  custody  of  the  conductor  of  the 
train. 

There  are  four  d*icuments  representing  one  car; 
(1)  the  bill  of  lading;  (2)  the  inspection  certificate  is- 
sued in  Winnipeg;  (.3)  the  elevator  outturn;  {-l)  the 
official  weight  certificate  issued  at  Fort  William. 

The  surrender  of  the  warehouse  receipt  properly 
indorsed  is  a  condition  precedent  to  the  shipment  of 
grain.  The  recei})t  thus  surrendered  is  sent  to  the 
Government  registrar  for  cancelation,  so  complet- 
ing his  records.  The  canceled  rcceij)t  is  returned  by 
him  to  the  elevator  company,  in  this  manner  complet- 
ing its  record. 

Mr    Piper,  of  the  I'-nipire  Klevator  Company,  before  the  Mnnitoha  Agri- 
cultural College. 


■WBF^ 


^B^flB 


■K 


TRAFFIC  0\  THE  GREAT  LAKES 


JJSr) 


7.  Statiitori/  gradcx  of  grain.— 'Vhv  cars  are 
shipped  under  seal.  Provision  is  made  for  Ciovern- 
ment  sampling'  eii  route,  in  ordei-  to  estahlisli  tlie 
^rade.  A  train  ot"  from  forty  to  forty-five  cars  can 
be  sampled  in  one  hour.  The  statutory  "grades  of 
^rain  are  1  Hard,  1  Northern,  '2  XortJicrn  and  li 
Northern.  The  statute  also  [)rovi(k's  for  further  sub- 
division under  tiie  heading-  of  eommereial  oradc, 
no  ^rade,  rejected,  condemned.  The  commercial 
grades,  usually  three  in  luimbcr,  are  established  yearly 
bv  a  })odv  of  experts  known  as  the  "Standards 
Board,"  appointed  by  the  Grain  Commission.  This 
Board  meets  once  a  vear,  usuallv  in  October,  at  Win- 
nipe^',  to  fix  the  commercial  «»rades  for  tiie  new  crop. 
"No  <>Tade"  means  ^rain  which  has  excessive  moisture, 
being  tough  or  damp,  'ilejected'  grain  is  that  which 
is  unsound,  musty,  dirty,  smutty  or  sprouting,  or 
wliich  contains  large  admixtures  of  other  kituls  of 
grain,  seeds,  or  wild  oats,  or  which  from  any  other 
cause  is  unfit  to  be  classed  under  any  of  the  recog- 
tiized  grades.  "'Condemned'  grain  is  grain  which  is 
in  a  heating  condition,  or  is  badly  i)in-burnt. 

Since  the  identity  of  grades  has  to  be  preserved  at 
the  terminal  points,  in  the  public  terminal  elevators 
by  biujiing  together  all  grain  of  tiie  same  grailc  it  is 
manifest  that  in  a  season  when  there  is  great  sub- 
division of  grades  the  etheiency  of  the  general  elevator 
facilities  is  much  Icsserjcd.  thereby  slowing  down  the 
railway  movement. 

8.  Special  chargcH. — In  addition  to  the  thru  rail- 


mm 


mm 


326 


INLAND    TRAFFIC 


« 


way  rate,  there  may  be  special  charges  covering,  e.  g., 
I)ulkheading,  where  a  charge  of  one  cent  per  hundred 
])oun(ls  is  made  to  cover  (himage  to  the  car  due  to 
partitions  heinp*  built  therein  to  separate  different 
kinds  of  grades  of  grain;  stopover,  one  cent  per  hun- 
dred, this  being  charged  wheti  car  is  stop])ed  in  transit 
and  its  contents  unloaded  and  reloaded;  a  diversion 
charge  of  $3;  and  demurrage. 

0.  Utilization  of  elevator  faeilifies'. — An  economi- 
cal utilization  of  the  elevator  facilities  at  the  head  of 
the  lakes  is  effected  in  connection  with  the  movement 
eastward  thru  the  I^ake  Shippers'  Clearance  As- 
sociation. It  is  in  effect  a  voluntary  clearing-house. 
A  shipper  may  have  delivered  to  him  warehouse  re- 
ceipts covering  grain  located  in  various  terminal  ele- 
vators. Instead  of  having  to  go  thus,  perhaps,  thru 
all  the  elevators,  the  Association,  thru  the  exchange  of 
warehouse  receipts  of  others  similarly  situated,  may 
be  able  to  concentrate  the  cargoes  in  one  or  two  ele- 
vators. 

10.  Anali/sis  of  grain  movement. — As  one  of  the 
great  problems  of  the  Canadian  Northwest  has  been 
concerned  with  rushing  the  grain  to  the  lakes  before 
the  close  of  navigation,  the  problem  of  how  and  to 
what  extent  the  movement  from  the  head  of  the  lakes 
is  water-borne  is  important. 

The  movement  of  Canadian  wheat  thru  the  Cana- 
dian '*Soo"  Canal  has  grown  from  one  million  bushels 
in  189.3  to  13.8  millions  in  1921,  the  high  point  having 
h^en  reached  in  1913  when  101  billions  of  bushels 


TRAFFIC  ON  THF  (JKKAT  LAKES 


;viT 


passed  thru  the  canul.  There  is  also  to  he  considered 
the  tlour  movenient  which  in  lU'Jl  was  licavier  in 
amount  than  all  other  grains  except  wheat  shipped 
Ironi  Ft.  William — Port  Arthui-.  This  li^ure  of 
14  millions  of  hushels,  countin«»-  4'  ^  hushels  to  a  bar- 
rel, brings  the  total  up  to  27.H  millions. 

The  percentage  of  Canadian  wheat,  exclusive  of 
flour,  shipped  from  various  ports  thru  the  Canadian 
and  American  "Soo"  Canals  for  a  period  of  years  was: 


From   Port   .Arthur — I'ort 
Williiiiii, 

TO 

Montreal     

Gforjjian  Bay  ports   .... 

Other  Canadian  port.s  . . . 

Buffalo    


19ir 
l.t 

:{;$.() 

I!».7 
t,>.!» 


1!)18 

1..' 

(i2._' 


t.l 


19_'0 

O.H 

:u.:{ 

_'(».T 
,V{.S 


1921 

:{H.2 
•M):2 
m:{.1 


11.  Grain  traffic  diverted  to  United  States:— The 
Evans'  report,  already  referred  to,  points  out  that 
the  traffic  diversion  to  United  States'  routes  appeared 
to  he  concerned  with  the  seasonal  peaks  of  the  grain 
business  of  Western  Canada;  that  is,  the  regular 
movements  tended  to  be  over  Canadian  routes,  the 
surplus  moving  over  United  States'  routes. 

The  distribution  of  the  movement  is  indic'tive  of 
the  importance  of  short-rail  route  methods  '  com- 
munication with  the  seaboard,  either  across  Ontario 
or  via  Buffalo.  Of  the  20..*}  millions  of  bushels  of 
elevator  capacity  in  the  public  elevators  of  Ontario, 
east  of  Port  Arthur  Bay  i)orts,  the  distribution  in 
point  of  capav'ity  is  as  follows:  Georgian  liay  ])orts, 
60.8  per  cent;  other  Canadian  ports,  i.  e.,  La've  Huron 


'i  I 


wm 


rsBT 


328 


INLAND    TRAFFIC 


and  Lake  Erie  to  Port  Colborne,  25.1  per  cent;  enst 
of  Port  Colborne,  14.1  per  cent. 

12.    Upper    Lake    traffic    encourages    specialised 
vessel  construction.— The  relatively  simple  nature  of 
the  traffic  of  the  I'pper  Lakes  and  the  large  bulk 
of  the  individual  items  thereof  have  encouraged  spe- 
cialized vessel  construction.    Cirain  and  Hour  furnisli 
a  considerable  amount  of  cargo  for  the  smaller  ves- 
sels, such  as  the  wooden  steamers  in  the  three  hun- 
dred and  three  hundred  and  fifty  foot  classes.    Lum- 
ber is  handled  to  a  large  extent  by  wooden  steam 
barges  which  tow  loaded  barges.     Schooners  are  also 
to  some  extent  still  engaged  in  this  traffic.     It  is  in 
the  traffic  in  ore,  grain,  and  coal  that  the  large  bulk 
freitihters  are  used.     In  this  traffic,   the  tramp  or 
"wild"  l)()ats  are  of  importance  as  a  regulative  factor. 
Tank  boats  are  also  used  in  the  carriage  of  oil— for 
example,  by  the  Imperial  Oil  Company— to  the  head 
of  the  lakes,  where  supplies  of  oil  are  stored  to  be 
shipped  on  further  west  in  the  winter  season. 

L'3.  Package  freight. —  Vhe  ])ackage  freight  of  the 
lake  includes  general  merchandise,  such  as  silks  and 
woolen  fal)rics  and  manufactured  goods,  canned 
goods,  fine  furniture,  bar  iron  and  steel,  etc.  Here 
the  traffic  is  carried  mostly  by  line  boats.  The  rates 
of  the  line  boats  are  usually  lower  than  those  of  the 
rail  carriers  by  an  agreed  difference.  While  the 
Northern  Xavigation  Company  and  the  Dominion 
Transportation  Company  enter  into  thru  rate  ar- 
rangements with  railways,  there  are  various  thru  all- 


MHW^W 


mmmsm 


THAiFic  ON  Tin:  ghi:a r  lakes 


a29 


water  independent  lines  operatin-  to  the  head  of  the 
lakes,  c.^r.:  the  Canada  Steamship  Li,Kvs,  Limited 
operating-  from  Montreal,  Toronto,  and  Hamilton  to 
Sault  Ste.  Marie.  Ont..  Fort  William  and  Port  Ar- 
thur, and  the  Dominion  Transportation  C.unpanv- 
Limiteil. 

U.  Influences  affect inrj  lake  rates.  The  rates  on 
lake-borne  trafiie  are  aft'eeted  l>y  the  bulk  of  the  mo\  e- 
ments  and  the  speeiali/ed  types  of  eonstruetion.  The 
balanee  between  the  trattie  in  different  direetions  is 
also  a  faetor  in  intlueneino-  rates.  For  example,  the 
large  bulk  of  eargo  nun  ing  east  thru  the  •'S(H)"  eanals 
leaves  a  large  amount  of  empty  vessel  spaee  moving 
westward  to  handle  this  eargo.  This  in  turn  reaets 
on  the  rates  on  west-bound  eoal,  the  oidy  traffie  offer- 
ing in  large  amount  moving  westward. 

15.  Load  factor  in  lake  traffic—Aw  iiistructive 
analysis  of  the  load  faetor  in  lake  trathe  is  eontained 
in  the  interim  report  on  the  (Georgian  Hay  Canal, 
published  in  191().  In  the  movement  eastw.ird  thru 
the  Canadian  and  the  Tnited  States  "Soo"  eanals  in 
1913,  there  were  earried  'I.m  tons  of  eargo  for  every 
net  registered  ton  of  vessel  eapaeity.  On  the  trips 
west-bound,  the  amount  averaged  about  one-third. 
Both  the  east-bound  and  the  west-bound  trattie  move- 
ments are  regular,  and  do  not  show  the  same  extreme 
peaks  as  appear  in  the  rail-borne  grain  trattie. 

In  the  ease  of  traffic  of  Tnited  States  origin,  the 
ratio  was  2.09  to  1  :  while  m  the  ease  of  traffic  of 
Canadian  origin  the  disparity  was  much  greater,  the 
ratio  being  7.91   to   1.     The  disparity  between  the 


HPSRV 


330 


INLAND  TRAFFIC 


Canadian  and  the  Ignited  States  movements  is  due  to 
the  much  greater  hulk  of  traffic-ottering  west-hound 
in  tlie  case  of  traffic  of  United  States  origin.  In  the 
case  of  Canada,  the  hulk  of  grain  moving  eastward  is 
the  predominating  factor.  The  traffic  of  Canadian 
origin,  from  Lake  Superior,  is  not  as  e(iually  dis- 
trihuted  as  in  the  United  States  traffic'.  The  iron  ore 
from  the  ore  ranges  of  Minnesota  moves  forward  with 
fair  regularity.  The  rushing  forward  of  the  Cana- 
dian grain  before  the  close  of  navigation  makes  a  peak 
load.  In  Octoher,  191.5,  there  were  loaded  out  by 
water  from  Fort  William  and  Port  Arthur  .52,- 
850,000  bushels  of  grain. 

In  the  traffic  with  Lake  Huron  and  Georgian  Bay 
ports,  Canadian  vessels  carried  5.20  tons  east-bound 
for  1  west-bound.  In  the  traffic  with  Lake  Michigan, 
which  'i  of  minor  importance,  the  bulk  of  the  move- 
ment was  westward,  the  ratio  here  being  1  eastward 
to  2.15  westward.  From  the  standpoint  of  compara- 
tive utilization  of  vessel  space,  the  most  satisfactory 
movements  are  to  Lake  Ontaiio  and  St.  Lawrence 
River  ports,  where  there  Mere  1 .76  tons  east-bound  to 
1  west-bound  and  Lake  Eric  ports  with  a  ratio  of 

1.09  to   1. 

1(5.  Movement  of  traffic.— An  annlysis  of  the  traf- 
fic of  Canadian  origin  moving  in  eithi  lirection  gives 
the  i' .illovving  percentage  distribution ,  ^ 

t  These  computations  are  from  the  Evans    repor*. 


TRAFFIC  ON  THF  (iUKAT  LAKFS  iiiil 

Last  U.tmul       West- Mound 

To  or  from  Lake  Erie 54.01.                .j.oj) 

To  or  from  Lakf  .Mitlii/ran 1,;JS 

To  or  from  I.aki-  Huron  and  (ii-or^nari 

^ ,  ""v   iiii.H\)              45.H1 

To  or  from  Lake  Ontario  and  tin-  St. 

l.awriiicc  Uivcr 11. (iM              r,],{)\) 

xVs  hearin*'-  on  the  traffic  fortunes  not  only  of  the 
proposed  (ieoigian  liay  Canal  hut  also  of  the  ex- 
pansion of  the  existing  canal  system  a  percentage 
analysis  showing-  the  direction  of  the  nioveinent  of  the 
total  traffic,  whether  of  Canadian  or  of  Tnited  States 
origin,  passin^r  in  either  direction  thru  the  "Soo"  Ca- 
nals is  of  value: 

Kast-Hoiiiul  Wpst-nound 

To  or  from  Lake  Erie H'.iAH  94.07 

To  or  from  Lake  Michigan lO.TT  l.oj) 

To  or  fronj  Lake  Huron  and  (ieorgian 

Bay  ports 4  14  o  14 

To  or  from  Lake  Ontario  and  the  St. 

Lawrence  River  ports 1.(51  ^.\H 

17.  Formation  of  Cdiiada  Trausportntion  I/iues, 
^^^f^- — 1»  June,  11)1.*},  an  anial^aniation  was  formed 
to  control  various  freight  and  passenger  services, 
wherehy  a  new  company  with  a  cai)ital  of  $-J.">,()()().()()(), 
tlie  Canada  Transportation  Lines,  Limited,  took  over 
the  Uichelieu  and  Ontario  Navigation  Company,  the 
Inland  Lines,  Xorthern  Navigation  Company,  St. 
Lawrence  Kiver  Steamboat  Company,  Quebec 
Steamboat  Company,  Canada  Inlerlake  Line,  On- 
larii*  and  Quebec  Navigation  Company,  Merchants' 


f9r^s^r^sBmm% 


;j;3a  INLAND  TRAFFIC 

Montreal  Line  S.  S.  IladdinM'ton,  Tlu.usuml  Island 
SteaiMl)oat  C'()nii»an>. 

Thr  UiflRlki-  and  Ontario  Company  already  eon- 
trolled  l.v  puirhase,  or  by  st..ek  (uvnersliip.  Hie  Inland 
Lines,     Northern     Navioation    Company,     Niagara 
NavioalK.n  Company,   St.    Lawrenee   Uiver   Steam- 
boat C"ompanv,   Tlumsand    Island   Steaml.oat   Com- 
pany and  Mereliants'  Montreal  Line.     The  Quehee 
Steamship  C.Mnpanv  operated  a  service  between  Que- 
bee  and  the  maritime  provinees,  as  well  as  between 
Quebec,  New  York  and  the  West  Indies.     The  C  an- 
ada  Interlake  Line  had  already  consolidated  the  in- 
terests oi)cratino-  under  the  name  of  the  Merchants 
Mutual  Line.     The  consolidation  is  now  known  as 
the  Canada  Steamship  Lines,  Limited. 

18.  A<h'n,t  of  hrcjc  tr.s.sr/.v.-ln   1898    the  con- 
struction of  a  vessel  47.3  feet  long  for  the  Bessemer 
Steamship  Company,  an  American  lake  boat  com- 
pany, was  hailed  as  marking  a!i  epoch  m  lake  ship- 
huildin.r.     Today  there  are  COO-foot  freighters,  and 
lar«rer  vessels  are  not  unknown.     Such  boats,  while 
nK)nstn>sities  from  the  standpoint  of  naval  architec- 
ture, have  great  carrying  capacity.      Ihe     J.  l  lei- 
pont  Morgan,"  which  is  (505  feet  .5  inches  m  length, 
can  carry  in  a  single  yoyage  a  cargo  equal  to  the  com- 
bined caVgo  capacities  of  every  vessel  alioat  on  Lake 
Superior  in  18(51.     On  the  day  this  boat  was  launched, 
its  captain  <leelared  that  it  could  carry  in  a  single 
voyage  as  nuieh  ore  from  Duluth  to  Cleveland  a 
the  first  steamer  he  had  commanded  twenty-eight 


THAI  I'K  ()\  Tin:  (iui:Ar  i.akks 


:J:;;i 


years  before  eould  have  earried  in  two  vears  mu\  .i 
half. 

While  a  boat  of  this  Ivne  i^  built  so  that  it  can  earrv 
learly  21, 000  tons  of  freight,  the  ehaniiels  in  tiu  De- 
troit, St.  Clair,  and  St.  Mary's  rivers  limit  its 
eff'eetive  earryin<»-  eapaeity  to  about  11,000  tons. 
In  the  loading,  management  and  uidoadin^of  such  a 
vessel,  meehanieal  appliatiees  are  freely  use<l.  It  is 
operated  eeonomieally  at  a  spetd  of  from  11  to  1*J 
miles  per  hour,  with  a  eoal  eonsumption  of  .'i  pounds 
for  eaeh  100-ton  mile,  about  one-fourth  of  the  c<»ii- 
sumption  rcfjuired  for  the  performance  of  the  saiiM- 
work  by  a  railway.  A  (;00-foot  ore  boat  can  be 
h)aded  by  the  use  of  ore  docks  in  2  hours  and  uidoaded 
in  from  .>  to  10  hours.  An  ore  boat  returnin^r  lioht 
can  make  30  round  trips  in  a  season  between  Superior 
and  Cleveland.  If  it  takes  back  c(»al,  it  can  make 
20  round  trips. 

10.  Lofulinc/  and  unload inf/.'Vhv  loading-  and 
nidoadin^  of  ^rain  can  be  carried  on  with  ^n-eat  ex- 
pedition. At  the  new  government  elevator  at  I'ort 
William,  100,000  bushels  can  be  unloaded  from  the 
cars  in  an  hour,  while  a  (JOO-foot  boat  caii  be  loaded 
in  less  than  4  hours.  In  one  day  in  1012,  fourteen 
boats  took  on  at  Fort  William  and  Port  Arthur  :J.- 
000,000  bushels  of  ^rrain.  At  the  end  of  Septenjber. 
1013,  one  <rn\'m  train  came  into  Winnipeg  with  (»S 
cars  of  wheat,  or  7<),.500  bushels.  I -^om  Winnipcir  to 
the  head  of  the  lakes,  the  trains  average  about  41  cars. 
This  means  that  one  OOO-foot  boat  can  take  on  nine 

XV  c— 23 


■awRSB 


IMi 


INLAND  TUAFFIC 


such  train  loads.  In  tlu-  .asc  )t*  the  Ji.OOO.OOO  Imsh- 
vh  lojKlt'd  ill  OIK-  <hi>  ,  this  was  <(|iiivaUiit  to  (i.'j  train 
loads. 

The  la!<'est  Canadian  lake  t'rei^fiter.  the  '•  W.  (irant 
Monlen,"  was  lannehed  in  iVpiil,  IlUi.  'I'lie  vessel  is 
02.3  I'eet  lon^'.  .V.>  feet  JMain,  and  :i'2  leet  deep.  Slu 
has  an  estimated  eanyin/^-  eapaeity  of  oHO.OOO  hushels 
of  wheat.  On  S«i)teinl,er  17,  r.n4,  this  vessel  car- 
ried out  of  Fort  William  a  ear^'o  of  4.>l,2l"t  hushels. 
This  is  the  e(|uivah'nt  of  10  average  grain  trains.  As- 
suming a  Western  townsiiip  to  have  an  average  yield 
of  20  hushels  per  acre,  this  cargo  eciualled  a|)pr()xi- 
mately  '»H  per  cent  of  this  yield. 

At  Port  MeXicoll,  the  Canadian  Pacific  port  on 
(;e()rgian  Bay.  on  August  11,  IDK),  there  were  un- 
loade('  382,700  hushels  in  13  hours.  At  the  same 
tmie  tiie  railway  loaded  out  141  cars,  or  220,100 
hushels,  in  10  hours. 

20.  Combined  inland  and  ocean  traffic. — It  is  at 
times  urged  that  the  improvenient  of  the  St.  Lawrence 
canals,  if  this  follows  the  improvement  now  under 
way  on  the  Welland  Canal,  or  the  construction  of  the 
(Georgian  Bay  Canal,  will  lead  to  ocean-going  vessels 
carrying  their  cargo  in  to  lake  ports,  without  hreaking 
hulk,  and  receiving  there  export  freights.  W^ithout 
going  into  earlier  experiences,  reference  may  he  made 
to  the  fortunes,  in  1001,  of  the  vessels  huilt  for  the 
Counselmen  Syndicate  hy  the  American  Shiphuild- 
ing  Company.  Altho  they  jounieyed  under  their 
own  steam  from  Cliicago  to  Europe,  the  venture  was 


■■I 


TH.M'FIC  ON    i'lll     (.1(1 


■VV    I.AKI.S 


.'i.n 


so  iiiij  lofitahlc  that  it  was  privet,  „,,  ...ftt  i  our  s.-a-ui,. 
'i'lie  fat't  tliat  tin-  vessels  n^iUi  imt  |,,a,|  to  tluii-  full 
depth  of  tut'nty  tVct  tiiiiil  Monhval  was  naelud  uas 
peculiar  to  the  existiiin^  t-anal   <lep-  ■.      1.,  a(l.liti..n. 
they  codhi   n.it  eoinpete   in   earyo  eapaeitv   with    tlir 
lai-KtM-  vessels,  either  of  the  lakes  nr  ul'   the  oee.ni. 
Their  sailors  were  paid  on  the  lak(    scah    .,!'  wa^.  s. 
ahout  twice  as  hi^h    is  the  ocean  seal.-.     In  addition 
the  vessels  were  siil.jeeted  to  liiirli  in^nranee  ehar-cs. 
The  Xo.  th  Atlantic  re(|uires  vessels  to  he  (4'  es|.«(rially 
stout  construction.     The  lake  V(  ssd   is  „„„(•  li^r|,t|y 
ccmstructed.     Th-  ...nm^rer  hulls   etc..  nr.de.l  U?r  the 
ocean  voyage  a(hj  ;,i>uii*   >o  pc-r  .-cht  to  the  cost.     The 
lake  vessel,  on  a(<..unt  ui'  the  snialier  amount  of  coal 
needed  to  be  carried,  lias  «Tra(er  car^A.  space  in  pro- 
portion to  size  than  the  oreafi-^r,,incr  vessel.     In  n  -n- 
crul,  the  latter  costs  ahou^  twice  as  nnich  j>er  t'  i     ,1 
car^o  ca])aeity  .  s  the  former.     A  nunhiiud  ■   :;.    .  m;! 
ocean  tyi)e  of  vessel  would  lack  the  eeouon.. 
ta^'cs  attachin^r  to  the  more  sixciali/.ed  typ 

21.   I^ahr  rates.-    V\iri\rvs   collected    hy    d' 
ways  and  Canals  Department  ^ive  the  followiiv       " 
mile  rate  data  for  wheat  for  the  years  ll>l7-li)21.  H!- 
elusive: 


I'ort  Williiin-  Montrr/il     

I'ort  Willi, nil     Georgian    H;iv 

l'«rt  Willi. iiii— Other  Canacri.iii   pmt 

I'ort  WilliJMii  — Huff,il..! 


I!»I7 


I!'IM  IftlO  1020  Ifl.'i 

:{"'»  Jlij  .:{|fi  ._"»-, 

■-'77  .-.'fH  .j.-.o  iM 

.'<»•.  .IVI  ISO  |_>. 

•  i>  .11;  ._>.',!  (IS  ; 


This  may  he  compared  with   the  all-rail  ton-mile 
rate  on  grain,  on  the  normal  hasis,  from  Fort  William 


3ti6 


INLAND  TRAFFIC 


t„  Montreal,  vi/.,  .401  cents.  On  the  lake  rate  to 
Montreal,  in  lin.>,  one  toi»  would  be  moved  7.37  mdes 
for  one  dollar,  while  all-rail  tlie  ton  wonhl  he  earned 
24S  n.iles.  During  the  suiuiner  ol'  IDKJ,  there  was  a 
lower  all-rail  rate  ^nving  a  ton-mile  rate  of  :M\  cents. 
On  this  a  ton  would  he  carried  277  nnles  lor  one 

dollar. 

22.  Ton-mile  rate  in  icatcr-honw  and  rail-home 
,,.,,y^V.— In  making  comparisons  between  the  ton-nule 
rate  on  water-boriie  traffic  and  rail-borne  traffic,  it 
must  be  remembered  that,  in  the  ton-niile  rate  on  the 
former,  there  is  included  no  char-c  by  way  of  con- 
tribution to  the  capital  cost  of  the  canals,  as  well  as 
of  the  improvements  in  harbors  and  aids  to  navifration. 
it  is  a  vessel  rate  only. 

In  the  -ase  of  the  rail  rate,  there  is  not  only  a  pay- 
ment for  the  out-of-pocket  costs  of  the  actual  haulage 
movement;  there  is  also,  of  necessity,  a  payment  to- 
ward the  maintenance  and  operation  of  the  railway 
a.   '  a  return  on  capital.     Owing  to  the  difference  in 
factors  concerned,  the  water  ton-mile  rate  (pioted  is 
not,  in  strictness,  comparable  with  the  rail  ton-mile 
rate.     The  canal  system  has  cost   \VU)  milhons  ot 
dollars.     The  maintenance  charges  on  this  in   li)15 
wcvc  1.4  per  cent.     A  computation  has  been  made 
that,  taking  interest  at  '6h  per  cent  on  the  capital  and 
adding  thereto  mnintenance  charges,  it  will  be  found 
that  this  contribution  figures  out  .14(5  cents  ])er  ton  per 
mile.     This  does  not  take  into  consideration  the  cost 
of    aids    to    navigation,    harbor    improvements,    etc. 


TRAFFIC  ON   TIIF  (IK FAT  I.AKFS 


:i;JT 


Keco^iiiziii^-  the  limitations  of  the  mctliod  um(I.  it 
would  appear  tliat  the  eorreeted  water  ton-mile  rate 
on  grain.  Fort  William  to  Montreal,  would  tor  liMT 
he  .411  eents.  On  this  hasis,  i^\  would  earry  a  ton 
243  miles. 

In  11)12,  figures  eolleeted  hy  the  Department  of 
Railways  and  Canals  indieated  that  Tuited  .States 
traffie  using  Canadian  waterways,  had  a  ton-mile  rate 
of  .007  eents  against  the  Canadian  rate  of  .i;)4  eents. 
The  eomputations  are  not  now  presented  in  this 
form. 

The  disparity  hetween  the  Cana«lian  and  the  Amer- 
iean  lake  ton-mile  rates  indieates  the  <litt'erenee  in  the 
nature  of  the  tratfie,  and  has  a  hearing  on  the  Hutl'alo 
movement  of  Canadian  grai?i.  The  hulk  of  Tnited 
States  traffie  earried  thru  Canadian  waterways  is 
eoneerned  wi^h  iron  ore  and  eoal.  Iron  ore  is  carried 
<l()wii  hy  the  large  freighters  from  the  ]Nf  in»iesota  iron 
ranges:  eoal  is  earried  haek.  Kx|)edition  is  desired 
so  as  to  get  the  maximum  numher  of  trips  in  a  season; 
eoal  ean  he  loaded  and  ufdoaded  hy  meehanieal  means. 
During  1012,  the  rate  on  ore  from  the  points  of  origin 
(►n  Lake  Superior  to  the  ports  of  destination  on  Lake 
Krie  was  .'>.>  eents  per  toT»,  or  .0(58  cents  per  ton-mile: 
on  the  return  movement  there  is  a  large  amount  of 
empty  cargo  space  and  coal  is  carried  at  exceedingly 
low  rates — during  1012  at  W  cents  per  ton,  or  .04<5 
eents  per  ton-mile. 

23.  Variations  on  rcatcr-lxn'nc  (/rain  rates. — In  the 
matter  of  rate"     i  water-horne  grain,  there  are  varia- 


I 

I 


;i.*j8 


INLAND  TRAFFIC 


tions  from  year  to  year,  as  well  as  from  season  to 
season.  In  11)21,  the  average  ton-mile  rate  from 
Fort  William  to  (ieor^ian  Bay  ports  was  .184,  while 
the  spread  was  .14.3  eents.  In  1!)2(),  the  averai^e  was 
.2")}),  while  the  spread  was  only  .204'. 

The  following  table  gives  the  average  ton-mile  rate 
and  spread  for  the  year  1921: 


Fort  Williatn — .Muiitrc-al 

Fort  William— (jf(»r{riiin    li.iy 

Fort  Wllliiiiii— Port    Colbiirnc 

Fort  William— Buffalo     


Averape  Spread 

.205         .071  (April  ami  October) 

.1S4         .U.I  (Jnm*  and    Dfcmiber ) 

.12:$         .(»Ki  (April  ami   Aii{riist) 

.()8:j         .120  (May   ami    Dwtiiibfr) 


24.  Comjmrlsou  hcticeen  lake  and  canal  movcn  ntn. 
—  In  1920  and  1921  the  ton-mile  rates  from  Fort 
\Villiam  to  Bnfi'alo  were  .223  eents  and  .083  eents 
respeetively.  These  low  average  rates  on  traifie  to 
Hnffalo  are,  in  the  ease  of  ore  and  eoal,  held  down  by 
a  highly  specialized  traffic  and  the  necessity  of  obtain- 
ing cargo  for  backloading  on  the  westward  and  north- 
ward movement.  The  grain  rates  aH'ord  a  more 
fairly  comparable  basis.  In  the  movement  to  Buffalo, 
there  is  large  bnlk  in  large  freighters.  These  are  able 
to  obtain  some  cargo  on  Lake  Erie  either  of  coal  or  a 
certain  amount  of  ])ackage  freight.  In  the  movement 
tiini  the  Welland  Canal  and  on  to  Montreal,  the 
physical  features  of  the  canal  system  limit  the  maxi- 
mum thru  cargo  to  80,000  bushels,  so  the  economies 
of  bulk  handling  are  not  so  largely  present.  The 
traffic  may  either  go  to  Montreal  or  be  transshij)j)ed  at 
Kingston.     In  either  case,  there  is  the  disadvantage 


TRAFFIC  0\  THE  (iHKA'j    I  AKKS 


iMH 


that  little  westbound  car^o  is  oftVred  on  Lake  On- 
tario. 

In  the  lake  movement,  short  tnps  with  niiniim^m 
coal  eonsinK^)tion  are  the  most  profltahh'.  Kven  in 
the  ease  of  a  vessel  whieh  is  ahle  to  i)ass  thru  the 
Welland  Canal,  the  loekin^  thru  takes  about  nineteen 
hours.  In  the  same  length  of  time  a  \  essel  eould,  aftei- 
delivering  its  cargo  at  the  foot  of  Lake  Kiie,  take  it 
back  as  far  as  the  Detroit  Uiver.  As  between  the 
movement  to  C  amidian  points  and  tiu  iiiovcnicnt  to 
Buffalo,  it  must  also  be  remembered  that  while,  lor 
example,  in  1012,  in  the  carriage  of  grnin  bel\vc«  ii 
Canadian  and  Tnited  States  ports,  the  average  ca- 
pacity of  the  Canadian  boats  was  102,()()0  bushels, 
in  the  same  movement  the  average  capacity  of  United 
States  boats  was  22(),000  bushels.  In  1921,  the  in- 
surance rate  oji  the  insurable  value  of  steel  hulls,  cov- 
ering all  risks  from  the  head  of  the  lakes  to  the  foot 
of  Lake  Erie,  was  3]  per  cent.  An  additional  one  per 
cent  is  charged  on  the  movement  east  to  Montreal. 


REVIKW 

Describe  the  metliods  i>i'  (hmit^  l)iisiru-,s  under  tlic  "Canacli 
Grain  Aft." 

What   are   some   causes   of   car   short.iffc  ? 

What  docunu'iits   are   used   it>   gr.iin   >hipnients.' 

Trace  the  d<'velopment  of  j^Tain  shi|)iinti»s  thru  the  "S,.,." 
Canals.      Why  is  the  traftic  heinir  (lix.rtfd  to  the  I  iiitcd  Static" 

What  influences  affect  rat*  s  on  Like  Iriflic.- 


i340 


INLAND  TRAFFIC 


Mow  has  specialized  traffic  on  the  lakes  affected  the  type  of 
boats  used? 

Why  have  vessels  built  for  combined  lake  and  ocean  service 
proved  unprofitable? 

What  causes  the  disparity  between  Canadian  and  American 
lake  ton-mile  rates? 

Note:  Xumerous  questions  of  business  practice  and  procedure  are 
discussed  in  detail  in  the  Modern  Business  Reports.  The  current  list 
wil!  show  those  which  are  especially  related  to  this  volume.  Among 
tlu-ni  may  be  mentioned 

9.    The  Industrial  Traffic  Manager 
'ii.    The  Motor  Truck  in  Highway  Traffic 


INDEX 


Adams  Express  Company.  270 
Agriculture,  and  Railva>  Truftic.  47-60 
American  Express  Company, 

l'i>iiiid.-(l   in    1x50,   27<i 
American  Railroad  Journal,  .'79 
American  Hallway  Association, 

Car  stTvirt"  rulps.  •.MiH-fiti;    I'er  dipiii 
charge,  269,  EnforriTiicnt  of  rule>, 
270 
Anomalies,  Import  Rate, 

Meaning  of.  192;  Canadian  Pacifir 
on.  l!»:i :  Influences  on  iiuport 
ratp.i,    194 


Baggage, 

Rules  for.  233;  Disney  d'fine>.  2;tH  : 
Railway's  liability  for,  "j:!:! :  Stur 
age  rliarges  for.  234:  Initial  rar 
Tier  liable  for,  234 :  Handling  of, 
in  Toronto,  235;  Carried  by  rail- 
wnvs,   23.5 

Bill  of  Lading, 

Conditions  of,  24.5;  Comjiany  lialiil 
ity,  2«6-48;  Forms  of  the.  2,">o- 
53;  I)o<uments  of.  2.')0;  .Stiaiicht 
bills.  2.->l;  Order  bill,  251,  Ini 
form  in  United  States.  251-52; 
Kxernptions  prohibiti'd  in.  31" , 
Contrnts  of,  310;  I'rovi.'ons  of 
grain.    31 1 

Board  of  Railway  Commissioners, 

Rpcoinmeniipd  by  Railway  Committee, 
37;   Membership  of,   37;    Qualitioa 
tlon«,    37;    Powers   of,    3'^;    .Turi^ 
diotion   over  rates,    3^;   Traf^ii'    fa 
ciliii'«  and  methodii.  39;  Procedurf 
of,    41;    Divisions  of,    into   two  sec 
fion»,  41;   Procfdure  informal.  42. 
Findings  of,  on  law  and  fart.   42  ; 
A)i|ieals.    43;    Accom|ilisliments    of. 
43 ;    Ai>pliOBtions    and    romplaints. 
44;  Freiu'ht  classification  and.   96 
99;      .Indgment     of,      in      Western 
Rntrs    CaM-.    120 

Bond  Ouarantees,  33 

Box  Car,  269 

British  North  American  Act, 

lutcrculonial     Railwa.' .      9.      ronliol 
under,   22 


Canada, 

( 'iiiM|iarlson  bewcen  pa'-'-enger  an>4 
f'  Mght  reciijits  in  213-14  Pas 
senger  travel  tcnd-i  to  increase  m 
the  same  ratio  as  population  in. 
21fi  Hail»a,v  Art  of,  and  pa^sen 
ger  rates,  227;  Kxpre^s  eompaiiie< 
in.  2H0;  Oram  elevators  aii'l 
grain  trathc  in.  llJl  ;!J:'i.  Canada 
•  irain  Act,  322 
Canada    Transportation    Lines,     Ltd., 

Formation    of,    '■'•'M 
Canadian  Car  Service  Bureau,  256-58 
Canadian  Express  Company,   2  ho 
Canadian  Freight  Association,  175 
Canadian  Freight  Classification. 

Karly     condition^,     t>0 ,     Minhaudise 
elnsses,    67;    .SiilidiviMons,    tiri;    In 
ternational    trallic    and,    6rt ;    Husi 
iiess    expansion,     69-71  ;     Quantity 
and   rating,    71,    Canadian   Freight 
,\ssociation    on    minimum    weights, 
74  .    Car   ni.  -.surements,    74  ;    Ship- 
ment costs,   77,   I'niformily   in,  HO; 
Mixing      privilege,      81;      KtTect      of 
mixing    privilege    on    shipi>ers    and 
I  onsumers.  «:! ,   Divergent  trade  in 
teresis    secure    compromise    rlas'titi 
cation,    M4 .    New    distribution    fen 
ters,  H5,   Long  and  short  hauls  for 
prairie   ceiiti  r-",    hi5 :    .lobbing   busi 
iiesses   and.    )*{>:    Kdmonton   object" 
to  extension  of  mixing  privilege   H7. 
Distributive  business,  a  question  of 
balai-.ie,   fix;   I'actors  nffeiting.   r*K; 
Value  of  the  arti<lc,   H9  ,    Hulk   and 
weitfht,    91;    Risk    attacheil    to   oar 
riage.  92  :    Facilities  anil  equipment 
ref|uired.   !M  ;   In  operatinn   in  Can 
ada.    96      Hoard    of    Itailway    Com- 
niissioners  ami.  96.   New   issues  of. 
;|H  ,   Hoard's  participation  in  cla-s'd 
ficalioiis      99:     False    clasaitication 
and   complaints.  99 
Canadian    National    Railway    System, 

20,  24.  25,  26 
Canadian  Northern  Express  Company, 

2x1 
Canadun  Northern  Railway. 

Increased    mileage,    16,    Position    of, 


in 


;342 


INDEX 


Canadian  Northern  Railway — contmueil 
in  repor;  on  ri'i;iondl  reorBiiiiuu 
tion,  ";i  .  FiiiHiii'ial  iicfijs  ilr 
loandi'd  ({oviTiinicnt  control,  'J2, 
•-'4 

Canadian   Pacific    Railway, 

Construction  work  l>> ,  l'J-i:5;  Kast 
ern  conucclions.  i;!,  lirand  Trunk 
oi'pOMtion.  l:i-14,  .Monoiioly  clause 
in  chiirti  r.  14;  WIichI  trunsjiorta- 
tion,  14-1");  Crows  N'est  I'a-s  ex 
tension,  15;  Suli~i(Jy  I'rovisiofig, 
15-lG  :  Govcrnint'iit  and,  2:i  ;  Mile- 
age "Jfi;  Switching  costs  on  138, 
Hlution  co^ts,  20i) .  Tt-ndcncy  to 
increase  weiglit  and  cost.  "J'Jl  ; 
Kinds  of  iiassciigir  ticket',  in,  2-11  ; 
Agreement  hi  tween  Uoininion  Kx- 
liress    Coiiiimny    and,    'Jt<2-8-l 

<3anadUu  Transportation, 

Waterways.    I  ,    Early   settlements,    1  ; 
Trade  routes,  2  .  Highway  improve 
mcnt.   3  ;   Freight  rates.   3-4  ,    Tir-t 
railroads.      5;      Chartia-i     gianid 
5-0.    Guarantee    Act.    ti ;    Uevelop 
luenl     period,     6;     Great     Western 
Ituilroad,    ii     7,    f<,    10-11;    Grand 
Trunk    Kailwaj,    ti,    7     H.    10,    11. 
1.1-14,   Water  comjietition,   7,  Gov 
ernment  loans.  7,   Hailwa.v   mileage. 
H,   Intercolonial  <-ailway.  H  ;  Untisli 
North     America     Act.     9;     Amalga 
niation    of    roads,     11  ;    Transconti- 
nental road.    lU.   Caiiiidian   Pacific. 
I'J ;     Monopoly.     14,    Wheat    trans 
portatiOM     H,    .Subsidy   and    Cana 
(lian    I'aciiic.    15.    MacKeiuie    and 
Mann    line     16;    Northern    I'acitic, 
It)     Grand   Trunk    I'acitic,    17-20, 
Hill    lines,    '_>0,    Operation    m    On 
tiirio      21.     Railway        Association. 
21;    Exiiansion   of  the   Govunnient 
railway   system.    22.    Conceiiii  ation 
of    railway    control.    25 
•S'- <■    Facilities   and   Equiiiment 
Canals, 

EftiiieiKv  of,  'AOA:  Terminals,  303- 
Oi);  "Soo"  Canal,  :ti:t,  317,  nin. 
;U9;  Welland  Ship  Caniil.  314 
ir>;  Ottawa  System.  31ti:  Hideaii 
Canal,  .llll;  Trent  Canal.  316:  No 
foils,  31ii;  .'^t  Lawrence  triifTic, 
317:     Percent ;M.;es   of    iraftic.    317; 

Tiitr=.      r;:>.« 

Carriage, 

Common  law  ohlie.itions  of  the  rail- 
ways. 243:  Hutchinson  defines 
common  carrier.  24:!  ;  Carrier-its 
an  insurer — liable  for  all  ktooils  he 
uv.dertook   to   carry,   except   in   tive 


Carriage — continued 

I'ases,  24;j  t4.  Kill  of  ladini:  and 
its  condition^,  24  5;  Liahilil.^ ,  2  4t>- 
4'*,  Insurance.  2J~;  Liability  as 
a  warehouseman.  24."!  .  Warehouse 
detined.  24'J,  .'■^iHrage  and  demur 
ras^e  charge.  241*.  Loss  or  dam 
a«e.  249  ;  Payment  of  charges, 
250.  Forms  of  the  lull  of  lading, 
250-5:1;  Order  bills  of  lading,  251  , 
Due  diligence.  25.!;  Conditions  of, 
2SH;  Carver  on  carriage  of  goods 
at    sea,    :!n<»;     Water,    309-12 

Carriers,  Common, 

Sie   Carriage 
Cars, 

Size  of   freight,   53  ;    Loading  of     5:i  ; 
Capacity     of.     21's;     Traveling     lu 
Pullman    and    sleeping    cars,    21^, 
Additional    weight    in,    219;     Kela 
tion    between    weight    and    co^t    of 
jiassenger     servu  i',     219-22  ;      Ho\ 
<'ar    called    a    'legal    tender"    car, 
2t)9. 
Sf    Car    Shortage 
Car  Shortage, 

Demurrage  rules.  258;  Embargoes, 
259;  Time  results.  259;  Higher 
demurrage.  261-62;  Georgia  Com 
mission  on,  265.  Klapp  on  aver 
age  agreement.  265  :  Walsh  on  rec 
iprocal  demurrage.  266;  Amer'tan 
Railway  Association  rules,  2ti'<- 
70,  Causes  for,  323 
Cartage   Service, 

Rates  for  202,  204.  Railways  and. 
202  ;  Service  performed  by  Do 
minion  Transport  Company  and 
Shedden  Conijiany.  in  East  (^aii 
ada.  202  Contentions  held  by  rail 
ways,  20.!:  Charges  for,  not  under 
Hoard  s  jurisdiction,  204 
Claims  Department, 

Work    of     27;i,    Delay    in    settlem'-ni, 
274;    Adjustments    made,    275 
C.  L.  and  L.  C.  L. 

FreiL'lit  classification,  ti2-64  ;  6«-77; 
Contention  of  railways  62.  Classes 
in  I  lilted  States  66:  In  Canada. 
67.  71.  Quantity  difTpiences  71- 
7:!,  Minimum  weights,  73.  .Ship 
ment  costs.  ,T:  Freight  claHsiticR 
tion.  83-93 
C.".?Tinnitation, 

I".:irnings.  223:  Motor    traffic     at''' ■■ 's. 
224.    Coniiiiiitation  tickets,   231 


Competition. 

Rad    and    wafer,    7 
104,      Lines     of 


10.    Rate-    aiil 
different      b'ni:l!i 


INDKX 


a4jj 


Competition— colli  I  iiiiimI 

M'i.  WuiiT.  iiirtiifiici-  oil  ruif^ 
!.•(',  rroiliirtmii  fi'iittTs  cliaujic. 
l.'.J.  I'oit  trallic,  \:,l.  Markets 
« iiiiipt'ir,  1')'),  Siigur  and  oil.  1  "iti ; 
loiii|ilt  uii'iilury  ('uiiiiiKi<iiti('>.  IJB, 
Tfriiaiml  rulfs  uiul.  170,  Hi'tut'cii 
wutiT  und  port  trutlii',  'JOti;  Com 
iiiiilation  liiiMru'>s  sulijcct  lo.  '^-4; 
KfiiiiriK'v  of  water,   ;i07 

Concentration  Rates, 

Advantage    to   i.hii>in'r,    -00 

Cost  of  Service, 

Kati!  making.  11'),  Distntmtioii  of, 
11  >:  llll••r^ti^t«■  Coiiinifrrc  Com 
ini-Msion  on,  ll'>:  What  it  covers 
116,  Ri|il.y  iuialy-i-  of  117.  Val 
u»'s  a  factor  in  Hit;  AllocaiinK  ex 
peiises.  120 .  Western  rate  case>. 
120,  1;J6;  CiiUora  Committee  re 
.I>ort,  121;  What  tlie  traffic  will 
Irtur,  121  123.  Kink  on,  122, 
I'as^euger   rates.    20^.    210.    221 

Cowles,  Mr.,  on  Railway   Kates,    lii9 

Crow's  Nest  Pass  Agreement,  172,   \>*f> 

CuUom  Committee,   121 


Demurrage, 

Sitorage  churRes,  249,  2."i,j-2<)«  ,  Car 
service  bureau.  2.5(i-j'< ,  Kules  a\> 
J. roved  by  Hoard.  2.'>t).  Anioiini 
of  claims.  2'ir*  ;  Car  sliortaife  anil 
2.08;  Controversy  over  2'>!»-61 
Increasid  cliariies  'J61  .  I'acitic 
Car  Demurrape  Hureuu  on  262 
Average,  26,'J  -6">  ;  Demurrage  rules 
of  the  United  .States.  26:!  .lames 
O  Klapii  1111,  2t).'>  l{e(  ipiocal, 
265-6",    .1     r.      Walsh    on     266 

Destination,   Chan-in:;.    Ill   Transit.    lO!" 

Dlherential  Bates, 

('iiiii|M  iitive  ciiiriers  11(1;  Ciiiiada 
Ir.  iL'ht     1  »',! 

Disney,    Delimlion   oi   Ba^gase.   2:i:t 

Distance, 

A  f.ii  liir  In  freiiitil  rates.  140,  As  a 
factiir  in  passen'rer  rates.  •jijV  . 
Ha-is  of  rati  s  in  otViiial  Classlii,  a 
■  Hill    tirritor\      111 

Distributive  Tariff, 

'  h    L'ln     of        1-1         lle.'IsOMs     for        1  ■*  I 

Dcicir.ioQ   Exprass   Company,    jnu 


Equipment  of  Railways 

.Sf.    Facilities   anil    Kq  .  iHnent.    Uevel 
■  ij)'  lint  of 
Erlckson,      ronimi-sion.      on       Kailwa.'. 
Hates,   U-  -120 


Evans,  Sanford,  on  Gra-.u  Shipiueni   lu 
(  Hiiiiila.    !.  1    ^.^'; 

Excess-Fare  Trains,   jotf 

Export   and   Import   Kates. 

lu  C'anaila,  lii'i.  Coiiimoilily  rate, 
on  stapl-s,  191;  K-xpoit  trattic  in 
Chicago  New  Vnrk  base  I  HI  I  in 
iMirl  rale  anomalies,  li'j,  Atlj 
tiiilc  111'  rail«a\s  loward.  1^:1  Im 
|iorl    lull'     liiiw    goMrneil,    1(U 

Express  Companies. 
•Vt'f    K.vprcs,    .slerviie 

Express   Rates, 

.V-'.'    Kates     i:\pr.-s 

Express   Receipt,    l.iaiuinv    iiii<lir,    2^9 

Express   Service. 

Scope,  2  76.  Ih!.  r-ialc  ('iiiiiiiiercn 
Coiiiiiiis.ioii  iipiirl  on  277.  Harl.\ 
histnry.  27h  IleriiilDii  originutes. 
-'•*.  Canadian  cdiiipaiiics,  2«0, 
Kelalioiis  with  railroails.  2'*1. 
.\greeiiienl  iirovisions.  '.'■*2.  Auentx. 
2->t.  Cl.is-iiicalioii.  2-''i;  Vulua- 
foil  1  li.irc's  2'<7.  Weight  and 
space  2s7  I.ialiilit.v .  :;->s  90,  Ui 
reipts  ami  contracts,  2M9-90. 
Standard  mileage  fanfTs,  ^91. 
Traffic  londilioiis  a  basis  of  rates, 
29J.  Four  sian.laril  larilTs.  'JO.'). 
Local  tariflfs.  29.'i  ,  Transfers.  29.'i  . 
(^iianlity  and  rales,  JliT;  First 
class  freight  rate.  U99  ;  Special  cir 
iMilars.  29',i  .  l>ivisions,  'j;i9 .  I'ack 
ace  rates.  :)oii  Kate  basis  not 
Kcientitio,    301.   Thru   rates,    yo4 


Facilities  and  Equipment,  Development 
of, 

Kxpaiision    of    Canadian    railway    s>s 
teiii      46:     |)i-triliiilion    of     railway 
niileage,   46;    I'oli-ntial  railway  traf 
lie.    47,    Ki  lalioii    of    agnciilliire    to 
railway    Iralhc,    47,    Adniil    Ir.illic 
49:      Kreighl     traftic.      i'.l  .     (  uiiiiiio 
ilities     carried      by      railvva>s,      '>o . 
Tonnai;e      sources        ."iii  ;       Kailway 
iiiilea;;!-.       .11:       Iinprov.nicnts      in 
roadbed    and    rolliiiL;   stoi  k.    ,'i2  :    in 
creased     si/e    of     freight    <ars.     f>'d  , 
Car     loading.     Ct'A  ;     Advantag's     of 
electric    traction    ovi-r    sicnn      ."I'l, 
}',.  ofiomy    ir.    opi  r.ition.     '•>, ,     How 
eariiiiikTs  ate  measured.  ^H 
Fink.   Albert, 

Tr.ifTic    co-ts    nnal.\7ed      122 
Freight   Business. 

Kreitfht  tr.itVic  in  Canada  between 
1907-1917.  49  Comparisons  of 
tri  ight    Irartic,     i;;:!  ,     Movement    a 


:}44 


INDEX 


fri'itjlit     rp- 
Iii   Caiiailu. 


tariff  class- 


Freight  Business — continued 

onowuy  one,  'Jll;  DifftTfiin-  in 
liasspngrr  and,  'Jll,  'Jt7;  Cuti 
nertion  with  puMscngi-r  linsinox. 
'-'12  l.t;  Mr.  W.  1'.  Hinton  on. 
2l;j;  I'iisscnK'T  and 
reiptfi  rompari'd,  °Ji:); 
214 

.SV^   Moving  the  Traffic 
Freistat  Olassiflcation, 

Fundiwncntiil,    tiO :    Karly 

iflcation.  CO;  First  tariff  sheet  in 
linitcd  Stales,  60:  Railway  rate 
Rroniiinc.  01 ;  Railway  contention 
on  ratinir.  02;  Carload  ratings,  6'J  - 
64;  How  tinilt.  0>;  In  the  I'nited 
States,  i'-i-  Oflieial,  .Southern  and 
Western,  O.'i ;  Movement  for  uni 
form,  in  Tnited  Stutes,  06;  In 
('anr  ia.  07;  International  trafiii'. 
68;  KNiiansion  of  Canadian  classi 
lication,  09;  Quantity  differenci'v 
71;  Spe<'iinen  page  from  Canadian. 
72;  Follow  Lot  Rule,  73;  Car 
measurements,  70;  Cost  of  C.  I... 
and  li.  C.  L.  shipments,  77;  Win 
consin  Commission,  7rt 

Sre  Canadian  Freight  Classifications 
Freight  Rates, 

Regulation    of,    33 ;    Railway    (^lauses 
Consolidation    Act,    33;    Legislution 
on,  34;  Rei>ort  on  rate  grievances. 
Sf);    .Turisdiction    of   Railway    Com 
missioners  over,   38;    Railway   rate 
f:rou]>in);,     01 ;     Railway     conten- 
tion     on.      02 ;      Carload.      02-04  ; 
Quantity    differences,     71-70;     Ini 
j)Ortance     of    freight    traffic.     101  : 
Tonnage  and  mileage  service,    lOU  : 
Rates    of    universal    interest.    Wl  : 
Competition    and.     104;     ("ouiiiarnl 
with    mercantile    and    manufactiir 
ing  liusiness,    10.5;    Kvils   of   panit 
IpI    lines.     106;     Class    tariffs     aucl 
commodity  tariffs,  130:    Articles  on 
which  carload  commodity   rates   are 
fixed.    131;   Class   rates,    132;   Com 
parisons    of    freight    traffic,     133 ; 
Ton  mile    rates,    133;    Difficulty    of 
comparing     foreign     freight     rates. 
IM.'i;     Terminal     charges     separate 
from,    136;    Two   factors    in.    13(1 ; 
Tf-rmina!    c!iarj.'e.     136-"?^:     Ilftn! 
age     charge.      136-38;      Switchiiisr 
costs   at  Winnipeg.    138;    Terminal 
cost    in    Wisconsin,    139 ;    Distance 
factor,     140;     Percentage     system. 
142;    Local    and    thru    rates.    144: 
Airiving  at  a  thru  rate.   145 

Sff  Freight  Classification  ;   Rate  Mak- 
ing 


Oovernmeut  and  the  RftUwajs, 

(ioverninent   loans   Orand    Trunk.    7: 
Control     of     National     Tranx-oiiti 
nenlal      liy,      20;       Railway      War 
Hoard.   21;    Rxpansion   of   (Jovein 
ment  railway  system,   22;    ('oiilinl. 
how   vested,    27;    How   the  (ioveri 
ment  aids,   27-29;    Loans,   2"'     3  1: 
.Suhsidy     (jolicies,     29-31;     Doniin 
ion  land  grant,  31;  {guarantees  au- 
thorized, 33;   Rate  regulation.   '■'•'.'•• 
(i.      38;     Railway     committei'.     :!4; 
Itoard  of  Commissioners,  37:   Tiaf 
lie     facilities,     39 ;      Provisions     for 
;:rain  movement,   40;    Ca^es  of  ap- 
peal. 42 

Grain, 

I'rovision  in  Railway  Act  of  (anada 
for  movement  of  the,  40;  Millini; 
in-transit  arrangements  and  read- 
justments in  flcur  milling,  1!>0: 
.VrrangrmentR  in  shipment  of.  to 
elevators,  198;  Grain  products. 
198;  Provisions  of  grain  hills  of 
lading,  311;  Claims  for  loss  or 
damage,  311;  Lake-Grain  Hill. 
312;  Grain  traffic  on  the  Great 
Lakes.  3:'l;  Canada  Grain  Act. 
:122;  Klevators,  322;  Four  docu 
ments  in  shipment  of,  324;  Stat 
utory  grades  of,  325;  Special 
charges  on,  325 ;  Analysis  of  move 
ment  of,  326;  Traffic  in  diverteil 
to  United  States,  327;  Variations 
on   grain   rates,   337 

Grain  Act,   322 

Grain   Shipments, 

.vcc    Great    Lakes   Traffic 

Grand  Trunk  Pacific, 

I'roject  of,  17;  Terms  of  charter.  1>*; 
(Jrand  Trunk  stoc'cholders  dissiit- 
isfied  with,  10;  Heiomes  political 
issue,    19 

Grand  Tru  ik  Railwtjr. 

I'i'osiiectus  issued  in  1853.  0;  (.'om 
petition  with  Great  Western,  7 : 
Government  loans,  7;  Mileage,  f^ ; 
Compared  with  Great  Western.  1"; 
Absorbs  Great  Western.  11;  Lliiet. 
controlled  by.  11;  Friction  with 
Canadian  Pacific,  13-14:  Grand 
Trunk    I'acific,    17-20 

3reat  Lakes  Traffic, 

Ib'velopnit  lit  of,  317;  Grain  ship- 
ments, 321  ;  Elevator  capacities. 
322:  Canada  Grain  Act,  322;  Li- 
censes ,nd  inspection.  322 :  Cai- 
shortage.  323;  Documents  nere^ 
sary.  324 ;  Statutory  grades  of 
srain.  :'.2"):   Rulkhead  charge.  325; 


fc    ■•jW™.' 


INDKX 


;u.i 


OrMt  Lakc»  Traffic — cuntiinied 

StoiioviT  cliariTf,  :JJU;  Itivi-r-ion 
<  liurKr.  .tJti;  MovfDifiit  |irulilcni^ 
:i2e;  Trurtir  Uiverti'd  ti)  I  nili'M 
Stat<^  .'1U7;  I'pix'r  I.uk>-o  inillii 
:JU8;  I'urkagc  fr-ijcht.  ;fJH ;  lUn-. 
:fJ9.  :i;t,">-;iH,  aaU:  Load  faiior 
:J21>;  1  TCfnlugc  analv-is  of.  :t;i1  ; 
Cnnnda  Transportation  Lnif-  Ltd.. 
I!.n  :  Ciiipuiity  of  vis-m'K,  :t:rj . 
Loading  and  iinloailine.  .'1:1'! . 
(»i'»'an  v;'s«<'ls  to  Inkf  I'ort*.  .I'.H : 
Ton  mill'  rati'  di.->|'ariti»'s.  ):iti 
WatiT  hornt-  grain  r.ilcs,  :i;i7. 
Canal   and    lako   moveuii-nt-.    .'JiJH 

Oreat  Northern  Railway,   'Jo 

Great  Western  Railway. 

(>|i<>nin);  of,  (i;  Coiniictition  witli 
(irand  Trunk,  7;  MilfaBt-  in  lf<i;ii 
H;  Coniparison  with  (irand  Trunk 
10-11,  Grand  Trunk  alisor»>s,  II 
First  Pullman  put  into  opcratum 
on,    'j:i(; 

Guarantee  Act, 

Canadian    l<i;i.slatiun,    t) 


Herudon,  William. 

Originator   of  «'xpr<'-.-    Im-iin-'     '_'7^: 

Advcrtiscnnnt     in     Morton     pajM  r- 

•J  7  9 
Highways, 

Iniproviil.     3;     Part    of      in    ilrvflop 

nit'nt     of    tradf,     il  :     I)is:ulv;intiit'''- 

«f.     -» 
Hill,  James  J.,  'Jl.   Kit 

Hintoii  W.  P.,  on  Fni','>it  Hu-ir -J  1  : 

Hutchinson,   Dctinitiun  i>t  Conn i  r.,r 

ri>r.     .■4:t 


Import  Rates 

N.  <    h^xport  and  Iiniiiit   Rates 
ItUand  Water  Transportation, 

Ai  a  rijriilator  of  V'ii;h|s,   ;!()":    ]>\^ 
advantagi'.s     of.     ;10T;     Conipitiiio' 
and    I'rticifnc.v,    ItO.-t ;    CanaK.    .J"- 
<llilij.'ations  of  farrier.-.  :iti9  ;  .Stuiu 
torv    provisions.  :!09  :   Hill  of  hiiiin:: 
<\cuipli<)ns.     .'!l<i;     Lial)ilii>      :!l'i 
l)ant:frous   shipnii-nts.    ,'!11:    (irain 
bills    of    lading.    31>.     Liens.    :il'J  : 
Comi'lPtP   d^!iv»ry.    'M'J;    CanadiiP' 
".Soo"    Canal.    :!l:i:    (ieorcian    Hh.v 
routr.    314;     Ottawa    -y-tnii.     :ilii 
Tolls.     :!10;     (inat      Lukes     tratle 
:!17:      rpper     LaNes     traflii  .     :il7: 
ConniiiKlitie.s    handled     J 15* 

Insurance.  ',^48 


Iiiterchaiigliig  TraAic  and  Other  Traffic 
Services, 

Tian-il  ai  laii,'' ii"  nt  -  I'.'fi:  Millinu 
in  transit,  lltii  1»7  .  lie^hipnieni. 
nt-*;  .stopover  arrangement,  I'.i"* 
Consignments  stoj.ped  in  transit 
I'.'it.  Destination  eliaiis;ed  in  Iran 
-It.  199;  Coneentratioii  ral's.  JOd, 
S|ii(  lal  rate  redni  iimis.  jol.  I'uri 
age  -erM(  e.  'JiiJ.  (arl.ige  I  hargK 
not   under  lioard-  juri-iln  ii  ui.   Jul 

Intercolonial  Railway, 

lioTeriinii  lit     aid-      ■<  ;     lirili-h     .Norlli 
.Vineiiea   Aet,    '.I;    Coii-lnn  I  Ion   and 
operation     of,      9.      l-.xleiismn     ar 
quired.    II.;    Finan<e.-.    In;    I'ereent 
age    (if    mileage,     tj 
International   Rate   Case, 

Cau-e  of  c  iiniplaint,  |sj.  'I'rattie  af 
fe(  ted  1>\  ■  lassiliration.  I-<'J,  .Sehed 
ule  .\  .  !■<.!;  Nei  ••s-it\  for  re 
grouping  rate  i.oinis,  l«;i;  Road 
justini  nt  l-*!! 
Interstate  Commerce  Commission, 

.Mistraet   from  report  on  express  Inisi 
ne-s.    1*77 
InterswitchiJig, 

Provision  liv  the  Imard     •J7K;  t  li.irg's 
for.    ■J7ii 


Jobbing  Bu.sinexses,  Classliieatiiui-  and. 

Ml 


Klapp.    James,   O.,   nn     Xviuage    heniur- 

lai.''-,     Jii'. 


Lake-Grain    Bill,    ::t'j 
Livestock,    imlI   irartie     ^7 
Local  T;ifilTs.   ■.■:'.■. 
Loss  01  l>araage.  in  Carriage. 

I'ouipul.il  1,11  tlu  lia-i-  of  tie-  valu>' 
of  111..  :.'.mmI-.  j  J!i  ;  .Vn'ii.  inii-t  !..• 
given     to     lie-    loiiipan;       ol.     .'49 


MacKeiizie  and  Mann  Railways,    b, 
Mileage, 

Karlv  railH;i,\s  ii\  C.inada  .^  ti  . 
•  irand  Trunk,  II  'JO;  Canadian 
-Northern  Hi;  (ir>at  NDriluTn.  'jn ; 
II!  <  >!it;il  :■•.  11  ,  Cain:  :;i  :t  •  \pa:i 
si.it!.  41);  l>i-triliiitioi  of.  4(i ;  !{.■ 
lalion  between  population  and.  47: 
In  Canada.  .'I'J ;  Ton  mileage,  r>l!  : 
Tonnage  an. I  niil.ag''  -.ivi..-  101; 
.■siamliird  miliag.  tarilT-,  191 
Mileage  Tickets.    1  :i 


IIP 


SMI 


INDKX 


MlUag-ln-TransIt, 

Trattio  wrvii'  ,   I'.Hl-'.lT 
Mlxtnt  Prtvilese, 

In  (imadii.  M;  I.i  i.it:iti<)np«  .1.  f^'J: 
Kffprl  on  !ii|>r>«TM  iinil  fnhsUin'TK, 
Xi;  ('(.rn|iinil:-<-  I'lawKltiriiliuii.  M; 
Jobliiiiit  ciiriiiili'  itiiiiiM,  V),  Olijtc- 
liDMS  In  l.lm.iiii  .n,  HV 
Moving  the   !  raffle, 

Aotuil  '  ir  iiiovi'in-iil-i,  L'.'.l;  Krci«lif 
cHr  .-luii^tui,  :;."il:  Miiiiifrst  firiyht 
riltaiii.-  hiirh  sp^  ■  Is,  J">'>;  l)<timr- 
rtMtf,  IVi-(iS:  (  '  11  M'lVlrr  liiiKllU 
-•'Hi;  I  )i-iiiMrniKi'  iitiil  '-iir  ^m'.  ;■•, 
2!\S.  f':ir  rcliMitiiiii  ;i  niilti-r  i«t  r,,i<- 
troV"i-\.  -V.l.  l!iiri;i--i'.l  ilf  n  ir- 
riii£c  '  liarK"",  Jiil;  I'll  111!'  ■ ':ir  Dr- 
niurriii?'  Miiifiiu,  -liJ;  S|»i'iiil  li- 
luy.H  III  Willi  lulitik'.  -'■'-;  \v"r:i(i<' 
dpniurnun',  :.'ii-{,  <i<'iiritiii  HiiilrniKl 
< '(iiniiiisxiiiii  nil  (U'KiiliiiM  of  i"M>, 
M.'>;  l{"ii|iroi'iil  (li'iiiurrairr,  _">"i 
•iH;  lliiilwiiy  int'TrthifioiiH  iiml  |ki 
tlieiii  chiirKi',  'i>'>X:  Aiiiprinin  Kinl- 
wiiv  Awoi  iiitiiiii,  -'US;  Int'TMwilrli- 
iiig,  270;  Indusiri.il  "iilinu.s,  -'71, 
Work  of  till'  i-liMMi-  cli'imrtiiiciii, 
273;  AdjustiMi  111-,  27') 


official  Classification,  i>'>.  i><i 

OiKtiincc  l)iii<i.s  of  riit'-'  in,  111 
Oil,  Kilt.-  for.  l.'Mi 
Order  BUI  of  Lading,  -'M 


Pacific   Car    Demurrage    Bureau,   mi    1>>'- 

iiiiirriiiri'   l{;itf.   2ti2 
Parallel  Lines,  Kvil>  of,  loii 
Passenger  Rates, 

Kllrit  of  .|i>tiiiiii'  on.  207;  Tiiiir  •  li- 
iin-nt  in,  2n7  0;  I'n^st  iinr  f:ir<-  a 
!iiutti|>li-  of  nitc  Mini  ili>t;inii',  J'.o 
Riiilwuy  Art  of  ( 'una  l:i  iiiiil,  227: 
.■^tiiiiiliird  taritTti,  227;  Si>i'fi:il  lai- 
ifft),  227:  Stiiiidiird  latiM  in  rfTi.  i . 
22S;  DitTcrcnt  kinds  of  |ms.s<'imi' 
lirkcl.s,  2:iO;  Milfuao  tirki-ts.  JU; 
f 'oinnnitation  tirkris,  2:U ;  I'lovi- 
uioii  for  iiirisiil  liikt'ts,  2:12;  Uiil'> 
for  litiKifakri',  2  if.  Dismv  ditiiir> 
liUKKiiiii",  2.i.i;  Uailw.i',  s  liuliilitx 
for  'oa)j){aKi',  2:t.{;  .^turaiic  <liiiru"'s 
for  oatf^ai:*',  2'>i.  iiniiiti  i  ai  I  it  i 
lialiii'  for  hanNTat;'',  2U  Hayiram' 
handled  in  Toronio,  2:{.");  Hait;riii:i- 
carrii'd  l)V  niilwavs,  2H.-);  SlccpiiiL' 
"•ar  >i'i\iii-,  2:iii;  (  las.-itifd,  2:(  i 
I'assciiirrr  ila— -  in  laiiniif.  2:i>. 
Avnaisr     hauls     in     forri>;n     ioiiiiiiii-». 


Pascenger  Ratea— i-oniiim.il 

2  ill;     I'lisKifmirn     |x'r     train     m     iir- 
I'lUll       roiiTH  rli'w,       240;       Zotn        lanlf 
wysli'in,     241;     MciIkkIb    uwd    in     l.u- 
i|H'an   |>a»-i     ir<T  rati-?,  242 
Passenger   Traffi    , 

Wiiirr  and  |  it  rnnipptitjon  I'l,  -''x; 
Dislaioo  iiii|Hirtaiit  fartur  in,  2i'7. 
210;  'linir  ficn  •tit  in,  2o7,  I  »- 
ci'nn  (iM',  2<W;  !■  «|H'iit<ivo  .•lation- 
aiid  tiTininals.  20"t  10;  !IbI.--  and 
dixtanir,  210;  I'ii--riiirp'  fan  .  2IO; 
Hu^ilH'ss  iiiduri'iii' lit-,  212;  In 
prailirf,  212.  \^  I'  Ilititon  on. 
2l;i:  (  oiiiparativi  «arninirs  oi  |ia— 
M-iiK'-r  niid  ficiifl"  lnl^•ill<•*<,  212: 
IliiiKilN  of.  211;  Kiiiiioinic  ilfpii's- 
sioii  ctTcil  I  II,  2l."i,  .Mcasiiii-nicnl 
il,  Jlli;  DitTi  rt'iircM  in  frt-iKli'  I'lisi- 
ni>»-  11  nd,  217;  Car  caiimit.v .  21**; 
I'lllliimn  -vrvuf.  21H;  -  I  )<  :td  " 
ttiiljlit  iiadinti.  21'.t;  lnrr«>a-i  in 
vM'iicht  and  cost  of  pasisrnarr  f"|iiip- 
iin'iil,         21'<;  Ki-lation         iMtwrrn 

wfiitlil  of  vein  !('  and  nturns  on 
robt,  221.  Wiinlit  and  rost  n  la- 
«urfd     ill     rapiKii  221;     Ocnipainy 

of  slcrpMnr  i-ai  .  222;  Siilniilian 
traffic,  22it;  < '011111  iitnlion  l>ii»<iii<»« 
as  part  of  railway  c  artiiii(r>«.  2.'  '• 
(■oiiiiinitalioii  liusiiMhrt  sulijccl  h. 
competition.  221;  \utoiiioliilrs  ai- 
fi-ct  rivinuo,  221  .AvcraRf  jiui- 
liiy.     22.'i;  Differences        Ixtw-ii 

-  fn  milt   and   piisseniter  Lnsines-     2-'' 
Per  Diem  Charge,  2tis 
"Postage  Stamp"  Rates, 

C.sl     of     service,      lOd.      loiiiil     n  li.   i^e 
theory,     110;    Suniniar>     of     ",•     'ii-- 
advnlitaues   of.    Ill 
Prnirie   Distributing  Centers,  s.-i 
Prairie  Standard  Tariff,  I'l.'i 
Prouty,  Mr  ,  on  Hailway  Wate-.   I  '  « 
Pullman  Service, 

I'ravel  in,  2IS;  L)ead  wciidit.  21'.'. 
Occupancy,  2'22;  Canadian  I'ltlic: 
220;  First  car  on  local  \\.-i.iii, 
2:f»'.;    Hate  bat-is.  2:iii 


Quebec  Resolutions  oi  1864,  9 


Uailway  Act  of  Canada, 

Canadian  Pacific  'h.  it.r,  1'  liatc 
itric\ allies  and,  •>•'";  l{c\  i-ioii  ol 
rates  t'l.        Provision        for        t"aiii 

iiiii'        1     It,      40;      Thr  ,1      rate.-      iHiiler 
th  44;       l'a!i.-einr' r       rat'-        and 

2'J ,  -       I'rovision  payii'tii        ol 


INDIA 


ail 


Railway  Act  of  Canada     iiiTitiiiiif><l 

chargi's,  -.Vi.  <>ii  i'\|in«^  i  l,i>>iti 
cation,   '.'x"! 

Hallway  and  Express  Compantas, 

A'-ningfiniivt'*  ln'twpfii.  j*!,  In  Ciin 
ada.  '.'"l;  rmviMniiH  of  an  iiisii'i' 
iiimt  IwtwiTii.  """J  h4.  .\rriirji' 
nii'iits  with  fr*'ik;lit  nt;ciit!',  -"i, 
Kxpri"*s  I'liis-'jtiriiticin     'J»"i 

Railway  Clause!)  Coniolldatloii  Act.  :;  i 
Railway  Committee, 

Minit..T!<lii|i    of.     M:     Work    of.     :i'i: 

I'll.ll  filllctloli-  nf.  :1B  ;  I<r|iort  T'<- 
omiiii'iidoU  Kiiilwiiv  ('oiniiii'-'-iuti. 
.17 

Railway   Constrtirtlon,    from    1882,    :;ii 

Railway  Asaocietlon 

OrBiini/HlKiii    <if.    '.'l 

Rate  Making,  BaitlH  of. 

"J'ostagf        Stamp"        thfi)i>,        l'M>; 
CowlcH    thror\     of.     liMl:     l>isiiiii,i. 
rnti'S.    110:    Kqiinl    iiiili'Uk:i-    tlifor> 
110:    raiiitHli/.itloii    plan    of.     Ill 
i'lix-'icHl    valiialHin      ll'J:    ('iinip)'ti 
;ion.    Il.I:     I>i-tnl>iition    of    ■.•■rvicf 
•ost.     ll.'i;     Wtiat     <  it-t     of     s,  •■\\r,- 
iMfan».     11(1.     (  i>riiiniv«ioiiiT    I'.ii'k 
>on    on.     Il^t,     II!*:    Allorutioii    of 
railwa.v    co^t".    I  JO:    Avciaiii-    Im^i^ 
of  coKt".    120:   Wliut  III.-  Irartic   will 
tx'ar.     I'Jl-'Jti:     I{alt«    in    (iiriiian> 
12.">  ;   CaiiHiliHn    MainifaituriT^'    A- 
•"Ooiation      t'-'tl:     Ki  ,i-onaMi'iii'»-    ol 
ratiK     127 

Rata  Making,  Competitive  Factors  in, 
rompetition  amoni;  Ijnrs  of  iliff.'iinl 
length.  147;  UiITiT' ntial  rati«. 
149;  Wat.T  conipililioii.  l.")0  ".:t. 
i'rodui'lioii  rinicr^  churif:*'.  l')!. 
Competition  of  eourt  traffic.  ir>4 
Markets  eompete.  !.">'.  ;  Siiirar  an. I 
oil  rat*";,  ir>f);  <'imiplcniiiitar.\  •  mn 
nioiiilii-.,  l.">^ :  .-I  I. p.'  of  111.(1  kel 
•  oinpttition.   l.")9 

Rates    and    Tarlffa,    Phases   of. 

CU-seg  of  freiiilit  tarifTs.  Hil.  Hail 
uay  Act  iiul.  IT.l  :  .'^taiiilaid  t.ir 
iffs  Uil  !>:;  :  .Scales  in  tlic  U.st. 
li>::  I'rairi.-  Staiidanl  laritT.  in.'i. 
Pa.  itic  .StiH  lard.  HU) ;  Uritisli  <'o 
lunihia  J.alies.  167:  Rate  si-alis  dif 
fer.  \GX;  Inirease  in.  from  litli 
!<»1«.  !*•":  Special  and  coinpc'i 
tive  tarilTs.  17:i.  Traiiscoiitincntal 
rates.  17,"):  Canadian  Frci;;ijt  As 
soi'iation  tiles  tariff.  17."),  %Vater 
compctilion.  170;  Maying  oint. 
176;  Class  rates.  177:  <«roiipintf. 
17«  .  I. as  anci  rail  routes  179. 
Commoditie-  east  bound.    l-'O 


Rates.   Espre.is. 

.\lVe.  i.-d  In  i|iiiiitiiv  297.  I'reiitht 
rate  a  lia-i-  .;".  .spe.  i.il  eiriMi 
lar-  I  oiiiiiiikIii\  tale-.  .!'>',< .  i'»r 
I'lts  iPMi.  I'ai  kaue  ral)'.  :iiiO  , 
(•radiiate  lalde.  :pmi  Not  iinitoMu. 
iiil  Sinijle  ilini  :;i»4 
Renhipment, 

TliIIic     -ITMH'.      IP- 

Ripley,  W.   Z.. 

K\pi  ndiliir.'  aii.il    «i-   hv  ,    117 


Schedule  A.,    !>; 
Sidings, 

Hate  to  |.riMili  ,    11111  liaii:;ed     2TI.    Ad 

vanla;;e-       m,        Jil.       A::riement 

forms     2  7'.' 
Southern  ClaKsltication.   •;'.    r,:i 
Standard  Mileage  Tariffs,  2:<1 
Standard  Tarlus, 

development  of  lill  (12,  .Scales  in 
West  It)!!  I'r.iiri.  Siainl.ird  ltl.'>, 
I'aiilic  Slatidaiil  t'iti.  liritisli  Co- 
luinliia  l,.ik.,  1117.  \\  tiut  i-  e.\ 
I  lulled  I'is.  .MaMiiniiii  rate>  ol 
I'ai  ilii  |tis  :  ( 'oialiiiialion  rales. 
liiM:  W  li>  „  .1..  ditr.r.  ItiH  Ma\ 
imiini  rail-  Hi!*.  I'asseiii;er  rates 
227  .ill;  hoard  rules,  227.  In 
elTect.     22- 

Stop-Over    .Arrangements, 

Tradir     S'   'HI  e.      1>.I>» 

Storage, 

Batfitaj;!'    rules     2;!'l  :    Charges     2^4; 
I)emiirra:.'e    i  liar^'e-    and.    249 
Subsidy. 

Canailian  I'm  itii-  ayr.-.  iiient  l.'i.  29; 
I'roviiii  la!  lines,  29.  Hailway* 
and  till-  iiiv,  policj.  :!0:  In  cash 
and    loan-      ::j 

Suburban   Traltlc.   22:'. 
Sugar,    Hale-   tur.    i.'.o 


Tariffs. 

Slandard    mileage.    291  :    Four   stand 
aril      292    9.");     Local    and    transfer 
2'' "» 
.s.c     Hates    and    TuritT-,     Phases    of; 
Town    Tariffs 
Terminal  Charge.-: 

l<'-tinct     from     haula^'e.      IMIi:     Grain 
•  arsoes.     i:!s       Wi-ionsin    CiMimi.s 
-ion    conipiit-         i:!9 
Tickets. 

Mill  i;;e.      2'!1        <  iiinriiiitatioii.      231; 
I'rovi-ions    fur    unused.    2^2 
Tiffany,   C.   H.,    127 


:U8 


INDKX 


TUna    EUmatit,     m    l'u«><>ni{rr    Trunic. 

Tonuuge  Sources,  'iii 
Town  TsrlnM, 

l»i-tiil>iili\>  r.ii' >,  l-"!.  liiliTnittionHl 
Half  Cum.  1"^.  <  lu^sitic.itiiMi  ii( 
fills  lutf,  I'J,  S.  Ill (lull-  A  ,  I  ■'.J, 
Kutc  ri'iiiljiisiiiii'iit  iKi,  <ir<iii|i  re 
«i'Miiii:i-iiii  III.  I  ■>  I :  III  ilii'  Kii«l. 
|H|.  Siiiiif  oliji'i  lioiix  ovfrii.iin-, 
IM.'i;  Kcliitiiili  111  rail-  rrilinlioiis. 
!'<♦>,  \\t>.lfrii  Kiiti  -  Cut  iiiiisi« 
tarift  riiirrHiii:>  iiKiii  l""7.  Tij«  n 
|K>iii|s    III    I'liiiachi,     liH 

Traffic,  Interchanging. 

.Si  f    ltilirrliaiij;mK   'I'lJirtir,    auU   Oilier 
.S«  r\  II  IS 
Traffic,   Moving   the. 

.Sir    .Mu^iiit;    thr    'I'laftii 

Transcontinental  Railway,   1,: 
Transfer  Tarlils,  ■2<t:, 
Transit  Arrangements,   lnii 

Hee   Inlrri'liuiigiiit;  Tiiitlir.    anil   Otiirr 
Trnftir    .Sirviir- 
Transportation,  Canadian, 

Sre  Cunudiuii   Truiis|iurlatiuii 


Upper  Lakes, 

Trnffir  on,  :il";  Traflir  nii.  i-iniinr 
BKi'K  .siivciulufd  vpssrl  loiislrurlioii 
,TJ.s 


Walsh,    J.    £.,    on    Kti'iproial     Di-niiir- 
ragf,    2titi 


Warehouse, 

KiiiIhh)    IihIiIi'    nit    a    warrhuiiiciiian 
.'»'      .M.ani!ij{  of  till'   liTiii,   J»H 
Watarwajrs, 

I'uniiiliun     lra(l<>,     1-4,     Kail>     silllv 
iiii'iits  III  I'aiiaila.    I    :i  .   I'unaN  |'i>> 
iiHili'    traiii-,    -~;i:    KuiIuh)     roiiiiir 
lilioii.     7,      HI.     Coiiipi'tiiivi'     lull's, 
I'i'l;      ('olii|>rlitioii      Hii'l      l<riiiiiia) 
rail's,    I7ti.    <'iiiii|ii'titiiiii    in    |.  i  sen 
KtT   trallii',    JdU 
Sir      linal      l.ake'<     Tmlli.  ,      lulaiiii 
Wall  I-    TraiiK|ii)rlaliiin 
Wells  Fargo  Express  Company,  'JT.i 
Western  ClassUicatlou,  li.'i.  ti'.i 

Tenninul    rost    per    ton    for    tliffereiit 
rlassi  s   of   the,    Ho 

Western  Rates  Case,  IJii 

Ciiiises  lariflf  rcarrangi'inent    [■•T 
■What  the  Traffic  WUl   Bear  "    Prln- 
cipU  of  Rates, 

C'lillom  ('ommittee  on,  I.'l.  t'oiii- 
niiNsioner  Lano  anil  1'.')  .  Allurt 
Kink  anil,  I'J'J ,  A|ipliratiiii<s  of. 
VSm;  I'rai'tiral  nieainni;  iif  Ihe 
term,  I'j:)  .luKtiflcatioii  of  12*. 
(ierninny  and,  125 
Wisconsin  Commission, 

Kale       re;;ulation,       IIH.       Ti  rininal 
eliarges,   139 


Zone  Tariff  System, 

As  a  means  of  riiliirtion  of  pas 
seiijfer  raleB,  241 ;  For  street  rail 
wuis,    241 


V  >  mtt  J    ,1  ■• ./    /;  .  ;/  n  J    i  v.    t  ht     I '.    .S'.    ,-/,    /'  V 
KINT.SPORT     l'Ri:SS,    KiM.sn.KT,   TrNNr.ssFF. 


